Bad Faith Insurance Denials: Your Guide to Consequential Damages
December 8, 2020 – Matt Albrecht
Insurance companies are legally required to pay claims in a prompt and fair manner. State laws such as the Washington Consumer Protection Act (CPA) and the Insurance Fair Conduct Act (IFCA) prohibit insurers from acting in bad faith. If your claim is denied in bad faith, you are entitled to compensation for the full value of your losses, including for any consequential damages.
You may be wondering: What are consequential damages in a bad faith insurance claim? The short answer is that they are additional losses that were incurred only because of the insurer’s failure to use good faith settlement practices. Below, our Spokane insurance attorneys provide a more detailed overview of consequential damages in a bad faith insurance claim in Washington.
Consequential Damages: Losses Stemming from the Bad Faith Denial
If you were the victim of a bad faith insurance denial in Washington, you are entitled to financial compensation for your damages. As a starting point, you can seek recovery for the underlying value of your claim. In other words, a bad faith settlement should include all of the money that you should have been paid had the insurance company handled and settled your claim properly in the first place. From there, additional financial compensation may also be available. Also referred to as ‘special damages’, consequential damages are the losses that occurred as a direct or indirect result of the bad faith denial. In a Washington bad faith insurance claim, consequential damages may include any or all of the following:
- Court costs and attorneys’ fees;
- Extra expenses incurred in appealing or challenging the denial;
- Any other loss that was a reasonably foreseeable consequence of the bad faith denial; and
- Emotional distress.
In other words, consequential damages are designed to ensure that you are not stuck paying the bill for costs that were caused solely by the insurance company’s bad faith conduct. Consequential damages are only one part of a larger bad faith insurance case. An attorney with experience handling bad faith insurance claims will protect your rights and help you maximize your financial support.
In some cases, other bad faith damages may also be recovered in a legal claim. For example, a Washington court may hit an insurance company with punitive damages if it acts in an especially egregious manner. Essentially a form of penalty damages, punitive compensation is still awarded to the plaintiff. Further, in a first-party bad faith denial claim, the IFCA allows claimants to seek treble damages for their losses.
Was Your Insurance Claim Denied in Bad Faith in Spokane, Washington?
Our law firm can help. At Albrecht Law PLLC, our Spokane insurance attorneys are diligent and effective representatives for policyholders. If you have questions about consequential damages and bad faith claims, we are more than ready to help. Contact us today for a free, confidential legal consultation. We handle bad faith insurance claims throughout Eastern Washington, including in Spokane County, Adams County, Lincoln County, Grant County, and Walla Walla County.
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