Montana Insurance Bad Faith Attorney
If an insurance company is supposed to pay a claim but refuses to do so, you may be able to collect money or other damages.
If you are having an insurance dispute or are the victim of insurance bad faith, the McGrady Law Firm is ready to assist you. Philip McGrady has experience pursuing unfair trade practice claims against large insurance companies. Contact the McGrady Law Firm today.
What is Bad Faith?
The term “bad faith” is used when an insurance company denies paying a valid insurance claim, whether in whole or in part. In other words, the insured person (or business) has insurance coverage for the event in question under one or more policies of insurance; however, the insurer decides not to cover the claim for illegitimate reasons.
Know your Rights when an Insurance Dispute Occurs
Dealing with an insurance company that fails to handle claims in a reasonable manner isn’t just frustrating, it’s also against the law.
According to Montana law, insurance companies are required to act with good faith and fair dealing. When the opposite occurs and insurance companies attempt to deprive policyholders of the benefits and protections to which they’re entitled, they are acting in bad faith.
Montana law requires insurance companies to investigate claims and evaluate them objectively. This means they are required to conduct a thorough search for evidence to support a claim. If an insurance company fails to conduct a full search or only attempts to find evidence to support denying a claim, it is acting in bad faith.
What is Bad Faith under Montana law?
Montana’s Unfair Trade Practices Act (UTPA) governs the practice of insurance business in the State of Montana. See § 33-18-201, MCA, et seq. “The UTPA was crafted by the Montana Legislature to address the unfair treatment of insureds by . . . insurance companies in the ‘handling of insurance claims.’” Thomas v. Northwestern Nat. Ins. Co., 292 Mont. 357, 365, 973 P.2d 804, 809 (1998).
Under Montana’s Unfair Trade Practices Act, no insurer may do any of the following:
(1) misrepresent pertinent facts or insurance policy provisions relating to coverages at issue;
(2) fail to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
(3) fail to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
(4) refuse to pay claims without conducting a reasonable investigation based upon all available information;
(5) fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;
(7) compel insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds;
(8) attempt to settle a claim for less than the amount to which a reasonable person would have believed the person was was entitled by reference to written or printed advertising material accompanying or made part of an application;
(9) attempt to settle claims on the basis of an application that was altered without notice to or knowledge or consent of the insured;
(10) make claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;
(11) make known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;
(12) delay the investigation or payment of claims by requiring an insured, claimant, or physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;
(13) fail to promptly settle claims, if liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; or
(14) fail to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
Mont. Code Ann. § 33-18-201.
Moreover, Mont. Code Ann. § 33-18-242 provides for an independent cause of action against an insurer, and sets forth the burden of proof:
(1) An insured or a third-party claimant has an independent cause of action against an insurer for actual damages caused by the insurer’s violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201. (emphasis added).
(2) In an action under this section, a plaintiff is not required to prove that the violations were of such frequency as to indicate a general business practice.
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(5) An insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue. . .
Mont. Code Ann. § 33-18-242.
And Mont. Code Ann. § 33-18-242(4) allows for the recovery of compensatory and punitive damages:
In an action under this section, the court or jury may award such damages as were proximately caused by the violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201. Exemplary damages may also be assessed in accordance with 27-1-221.
Don’t let these statutes confuse or overwhelm you. The purpose of referencing them is simply to show that if your insurer fails to pay a valid claim, then there can be serious consequences. As a plaintiff against an insurer, you can receive an award of punitive damages.
And because the stakes are so high, an insurance carrier that realizes it has committed bad faith will often try to settle the case out of court and avoid going to trial.
Types of Insurance Litigation Claims Handled
The McGrady Law Firm handles the following cases as it affects the interests of business and consumer clients:
- Bad Faith insurance claims
- Litigation of insurance disputes
- First-party loss claims
- Third-party liability claims
- Coverage issues under personal policies: life insurance, disability insurance or medical insurance
- Disputes over cancellation or rescission
The type of bad faith case will generally determine the kinds of compensatory damages that can be recovered. If you believe that an insurance company is treating you unfairly or suspect that you might have a bad faith claim, contact the McGrady Law Firm.
Contact an Insurance Lawyer For Free
Don’t wait to contact a lawyer because there are certain deadlines and requirements. If you miss these deadlines, you can lose the ability to pursue your case in court.
Philip McGrady is an insurance lawyer who takes on bad faith cases for clients on a contingency basis. That means clients do not pay unless they win.