Understanding Bad Faith Insurance Claims
Most people expect insurance companies to handle claims fairly and in good faith after there’s been an accident or other injury. The unfortunate reality is, that doesn’t always happen. In Rhode Island and Massachusetts, insurance companies have a legal obligation to investigate claims honestly, communicate fairly, and avoid unreasonable delays. When insurers deliberately ignore or disregard their duties and place profits ahead of policyholders and injured individuals, the consequences can create financial problems and undue stress.
At Corrao & Robles Law, attorney Amanda L. Corrao represents individuals facing unfair insurance practices following accidents and injury claims. When an insurer is refusing to pay out for a valid claim, delaying payment, undervaluing damages, or engaging in deceptive tactics, injured individuals on the receiving end of these actions may have legal options under Rhode Island and Massachusetts law.
What Is Insurance Bad Faith?
Insurance bad faith occurs when an insurance company fails to uphold its legal obligations to policyholders or claimants for a variety of reasons. Insurance carriers have a duty to act reasonably and fairly when evaluating and resolving claims. When they violate that duty and it’s proven to be in bad faith, they can be held legally responsible for the harm caused by their actions.
Bad faith conduct arises in numerous scenarios, including:
Most insurance companies have significant financial resources and legal teams focused on limiting payouts. Understanding whether an insurer’s conduct crosses the line from a disputed claim into bad faith conduct requires a detailed review of the facts, policy language, and claims handling process.
First-Party vs. Third-Party Bad Faith Claims
Bad faith claims generally fall into two categories.
First-party bad faith claims involve disputes between an insurance company and its own policyholder. These cases may involve denied property damage claims, uninsured motorist claims, or medical payment disputes after an accident.
Third-party bad faith claims happen when an insurance company fails to reasonably settle a claim against its insured member, potentially exposing the third-party victim to additional financial liability. These cases can become particularly complex in situations involving major accidents when severe injuries or substantial damages result.
Rhode Island and Massachusetts Insurance Laws
Rhode Island and Massachusetts have laws that are designed to protect consumers from unfair insurance practices.
Rhode Island Bad Faith Insurance Laws
Rhode Island allows claims against insurance companies that fail to act in good faith when handling valid claims. When an insurance company acts recklessly or intentionally disregards its obligations, injured parties could be entitled to additional damages beyond the original claim value.
Rhode Island law also prohibits certain unfair claims settlement practices, including knowingly misrepresenting facts related to coverage and failing to promptly resolve claims where liability is reasonably clear.
Massachusetts Consumer Protection and Insurance Laws
Massachusetts provides strong consumer protections through laws that regulate unfair and deceptive insurance practices. Insurance companies operating in Massachusetts must comply with strict standards regarding communication, investigations, and settlement conduct.
In some cases, consumers may pursue claims involving unfair settlement practices under Massachusetts consumer protection statutes. Similar to Rhode Island laws, damages may include compensation beyond the underlying insurance claim itself.
Since every insurance dispute is different, evaluating whether conduct is truly bad faith rather than a simple accidental oversight often depends on timelines, documentation, communications, and the insurance company’s overall handling of the claim.
Common Situations That Lead to Bad Faith Claims
Some examples of where bad faith insurance could arise include the following.
Car Accident Insurance Disputes
People who’ve been injured in a serious car accident are often relying on insurance coverage to pay the resulting medical bills, lost wages, and repair costs. But some insurers will try to minimize their payouts by disputing liability, questioning injuries, or delaying claim evaluations despite the existence of substantial evidence supporting the claim.
In severe injury cases, insurers may hastily pressure someone who’s been injured into accepting low settlements before the long-term impact of their injuries is fully understood.
Slip and Fall and Premises Liability Claims
Property owners and their insurers may attempt to deny responsibility after slip and fall accidents or other premises liability incidents. Insurance companies sometimes argue that dangerous conditions were obvious and should have been handled differently, or attempt to shift blame onto the injured person despite clear evidence that shows negligent property maintenance.
A thorough investigation is critical in these cases, especially when surveillance footage, maintenance records, or witness statements are involved.
Dog Bite and Injury Claims
Dog bite claims can become contentious when insurers minimize the seriousness of injuries or dispute liability. Potentially deadly infections, scarring, emotional trauma, and long-term medical costs and complications may significantly affect the value of a claim.
Insurance companies will sometimes offer lowball settlements or otherwise resolve these cases quickly before the full extent of damages is known.
What to Expect During a Bad Faith Insurance Case
Investigating the Insurance Company’s Conduct
One of the first steps of investigating bad faith insurance involves reviewing claim files, communications, denial letters, medical documentation, and settlement history. Attorney Corrao may evaluate whether the insurer followed industry standards and complied with state insurance regulations with their actions.
In some situations, internal insurance company communications and claims handling records also become important evidence in determining whether genuine bad faith conduct occurred.
Negotiation and Litigation
Some bad faith disputes can be resolved through negotiation once the insurance company recognizes potential legal exposure. In other situations, litigation may become necessary to hold the insurer accountable.
Bad faith litigation can involve multiple legal and factual issues, including coverage disputes, valuation disagreements, expert testimony, and statutory consumer protection claims. Because insurance companies have teams devoted to aggressively defending these cases, experienced legal representation is critical to protect an injured person’s case.
The Importance of Acting Quickly
Insurance disputes are often time sensitive. Delays in seeking legal guidance may affect access to important records, communications, and evidence related to how the claim was handled.
Additionally, Rhode Island and Massachusetts both impose statutes of limitation that restrict the amount of time individuals have to pursue legal action. Missing important deadlines can limit or entirely prevent recovery.
Preserving documentation, including emails, letters, medical records, settlement offers, and claim notes, is vital.
When to Speak With an Attorney
Bad faith doesn’t just mean a denied claim. But there are some scenarios where actions of bad faith could be present, and speaking with an attorney can be especially important in making that determination. Those scenarios include:
Insurance policies and state insurance laws can be complicated. Having an attorney review the situation can help determine whether the insurer’s conduct violated the law.
Work With Corrao & Robles Law
Amanda L. Corrao is a founding partner of Corrao & Robles Law and has spent over a decade advocating for injury victims throughout Rhode Island and Massachusetts. Her side of the practice focuses on personal injury cases, including complex insurance disputes involving car accidents, slip-and-falls, dog bites, and similar claims.
Attorney Corrao is known for combining aggressive advocacy with compassionate client representation. She understands that injured individuals are often dealing with financial pressure, uncertainty, and frustration when insurance companies refuse to handle claims fairly. Her goal is to help clients feel informed, supported, and empowered throughout the legal process.
Attorney Corrao brings experience navigating different court systems while pursuing favorable outcomes for clients dealing with injuries or their fallout, including bad faith insurance tactics.
Take Action Today
Insurance companies have teams of adjusters, investigators, and attorneys working to protect their financial interests. It can feel daunting trying to take them on. If you believe your claim has been unfairly delayed, denied, or undervalued, we want to help.
Corrao & Robles Law represents injured individuals throughout Rhode Island and Massachusetts in complex insurance and personal injury disputes. Speaking with an attorney can help you better understand your rights, options, and the next steps available in your case.