Having insurance for your motor vehicle is more than just being able to drive legally on the road. It also provides you with peace of mind knowing that you’re covered should an accident happen. However, what happens when the insurance company you pay premiums to fails to act in good faith? Are they obligated to do so, and what does that even mean? In this blog post, we’ll dive into the concept of “good faith” and how it applies to your motor vehicle insurance policy.
The term “good faith” refers to the obligation of your insurance company to act fairly, honestly, and with your best interests in mind. Essentially, it’s a legal requirement that obligates the insurance company to treat you with respect, loyalty, and fairness. Additionally, the insurance company has a legal duty to pay claims and benefits on time and provide adequate coverage for damages.
However, this duty of good faith extends beyond handling claims and paying benefits. It also includes the insurer’s obligation to investigate a claim thoroughly, provide you with a clear explanation of policy coverage, and treat your communications with respect. Thus, if you feel that your insurance company has not acted in good faith, you may need to take legal action to ensure they fulfill their responsibilities.
But what happens if your insurance company doesn’t live up to its obligations? As a policyholder, you have the right to sue your insurer for bad faith insurance practices. In such circumstances, you may be entitled to damages for the insurance company’s actions and what would have been covered by your insurance policy. For example, if your insurer unreasonably delays paying a valid claim, you may be able to recover compensation for additional expenses incurred during the delay.
Another important aspect of good faith is the duty of prompt investigation. Insurance companies have a responsibility to investigate claims and conduct prompt evaluations. When an insurer fails to do so, you may experience difficulties in getting proper medical care, managing bills, and repairing damage. Failure to fully investigate can be considered bad faith on the part of the insurer.
Overall, it is critical to recognize the legal responsibility of motor vehicle insurance companies to act in good faith towards their policyholders. This includes prompt payment of claims, treating policyholders with respect, and communicating openly and honestly. Should an insurer fail to fulfill these obligations, policyholders may recover additional damages or pursue legal action. By having a full understanding of these requirements, you can ensure that your motor vehicle insurance claims are handled appropriately, and that your insurer treats you with the respect and fairness you deserve.