How to Sue an Insurance Company for Bad Faith in South Carolina

April 4, 2024
Savage, Royall & Sheheen

Many people talk about horror stories that they had in dealing with insurance companies. While insurance companies act as if they have power over you, the law gives them certain obligations.

Like any party to a contract, they must act in “good faith”. If they have acted in bad faith, you may be able to sue the insurance company directly, and they may be liable to pay you damages.

For help with your insurance-related case, contact the experienced bad faith lawyers at Savage, Royall & Sheheen, LLP, in Camden, SC.

The Insurance Company’s Obligations Don’t Align With Their Goals

Insurance companies care first and foremost about their financial interests. They do not care about the well-being of their policyholder, nor are they interested in your finances and situation.

Their sole motivation in most circumstances is to pay as little money as possible, regardless of whether it means denying a claim in its entirety or trying to settle for the lowest possible amount.

In the end, if you are forced to file a bad faith lawsuit in court, your policyholder could end up in a worse place because they could owe you money.

Insurance Company Practices That May Rise to Bad Faith

To make your life much harder, insurance companies may do the following bad faith practices:

  • Unreasonably deny a claim when it is backed by solid and persuasive evidence
  • Ignore your claim for a considerable amount of time after you have filed it
  • Make extremely low settlement offers that have little to no basis in reality
  • Misrepresent facts or policy provisions to make your case harder
  • Become very unreasonable about the level of documentation that they are demanding from you

Insurance companies like to ride the line of bad faith as much as they possibly can and still be able to get away with their conduct. They know that their delay tactics can make life more difficult for you, such that you would accept a low settlement offer just to bring the legal process to a conclusion.

The insurance company often takes the risk that they will be able to get away with their conduct.

If you do not have a bad faith attorney on your side, they may very well escape without consequences.

Is It Difficult to Sue an Insurance Company for Bad Faith?

There are some barriers to suing an insurance company under South Carolina law. Generally, you are not allowed to sue an insurance company with whom you do not have a pre-existing relationship. This means that you are usually only allowed to sue your own insurance company.

However, there are ways to sue the other driver’s insurance company, for example, when they have acted unreasonably during the claims process.

The first thing that you need to do is to take your case to the jury and win. Here, you would need to obtain a verdict that is higher than the insured’s policy limits. At that point, you would need to work with the defendant to get the right to sue the insurance company.

There is a deal to be had between you and the defendant. If you have obtained a verdict for more than the policy limit, the defendant would be the one on the hook to pay you the excess damages.

The trade-off is that you will be getting the defendant’s right to sue their own insurance company, while you pledge not to go after their assets. At that point, you can then file a first-party bad faith lawsuit against the insurance company.

Do You Have a Bad Faith Case?

Not every insurance company’s business practice rises to the level of bad faith. Generally, parties to a contract are presumed to have acted in good faith. There is a relatively high bar that you must clear to show that the insurance company acted in bad faith. Usually, this requires a showing of intent.

There are questionable business practices that insurance companies use as part of their daily business. However, there are times when the insurance company can cross the line. It takes somewhat egregious conduct for a jury to decide that it should punish an insurance company.

The usual delays and hardball negotiating tactics are most often not bad faith. Nonetheless, if the insurance company is taking far too many liberties with you, there may be something that you can do about it.

How to Avoid Bad Faith Tactics With the Presence of an Attorney

Insurance companies will be more afraid to use some of their questionable tactics when they see that you have hired an experienced lawyer.

They know that a lawyer will not hesitate to hold them accountable. Insurance companies tend to cross the line when they are dealing with self-represented claimants who they know may not have the ability to get justice.

Before your insurance claim is hindered by unreasonable delays or tactics, consider having an attorney on your side to help you deal with an insurer.

Learn More About Suing an Insurer for Bad Faith in South Carolina

Call the bad faith insurance law firm of Savage, Royall & Sheheen, LLP, to learn how we can help you. We offer free consultations to prospective clients.

To get started, send us a message through our website or call us today at 803-432-4391. You pay us nothing unless you are paid yourself.

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