insurance bad faith

Bad Faith: When to Fight Your Insurance Company

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Imagine the shock of losing a loved one to a tragic accident.  Family members might rely on each other for comfort, but will rely on the life-insurance policy, a binding contract, to assist with financial considerations in the wake of such a loss. 

Now imagine that your life-insurance company decides that it would rather save money than paying what it rightfully owed under the policy. This is called insurance bad faith and, as terrible as this may sound, this is relatively common and is exactly what happened to Brian Flores and his “good neighbor” State Farm.

Case Study: Estate of Nathan S. Foyil v. State Farm Life Insurance Company

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In the wake of the U.S. Supreme Court legalizing gay marriage, Brian Flores married the love-of-his-life, Nathan Foyil. These two gentlemen lived in Houston, Texas, where Brian worked in public education and Nathan in the oilfields.  In late 2017, tragedy struck.  Nathan slipped in his bathroom and suffered internal bleeding. Nathan would later be hospitalized and ultimately died from his injuries on October 31, 2017.

For a long time prior to his death, Nathan maintained life-insurance coverage through State Farm.  When Nathan and Brian married in 2016, Nathan changed his policy to reflect Brian as the beneficiary.  

In the weeks following the passing of his late-husband, Brian submitted a claim with State Farm to collect on Nathan’s policy as its beneficiary.  State Farm ultimately denied Plaintiff Flores’ claim, but waited roughly six months—until May 9, 2018—to notify Brian of its decision.

Between Nathan’s passing and State Farm’s ultimate decision to deny coverage, State Farm corresponded with Brian and led him to believe that they would honor the policy. They didn’t.

The temptation of saving money meant more to State Farm than did the well-being of its beneficiary.  State Farm’s actions forced Brian to file a bad faith lawsuit.  

Bad Faith Definition

Insurance bad faith is a legal term under United States law that describes a tort claim that an insured party files against an insurance company for its bad acts.

The law demands that insurance companies owe a duty of good faith and fair dealing to the persons they insure. This duty is often referred to as the “implied covenant of good faith and fair dealing” which automatically exists by operation of law in every insurance contract.

If an insurance company violates that covenant, the insured person may sue the insurance company on a tort claim in addition to a standard breach of contract claim. That means that if the insurance company’s bad acts were particularly egregious, the insured policyholder may be able to recover an amount larger than the original face value of the policy in a bad faith insurance lawsuit.

Fight Back

Death is inevitable, but that doesn’t make it any less difficult.  It is particularly difficult to lose a loved one in a sudden tragedy and individuals close to the deceased are particularly vulnerable during the mourning period. 

Unfortunately, tragic circumstances present the opportunity for fraudsters to take advantage of the family members of the deceased. Death policies are expensive for the insurance company to pay out and some insurance companies will do anything to find a reason not to cover you.

If you find yourself in this unfortunate situation, contact a lawyer who specializes in bad faith insurance claims. Any reputable bad faith insurance lawyer will give you a free consultation on your particular case and should work on a contingency fee basis.

If you need assistance, you can also chat now with a attorney, where you’ll be instantly connected to a lawyer who can give you legal guidance on your specific case or question.

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