In California, if you get into an auto accident with a negligent driver, you can file claims within a certain period of time with the negligent driver’s auto insurance company. However, things start to get complicated if the negligent driver does not have bodily injury liability insurance or enough coverage or they do not have insurance at all. In such situations, you need to have uninsured and underinsured motorist coverage.
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Uninsured and Underinsured Motorist Coverage
Looking at the example shared at the start, underinsured motorist coverage is when the negligent driver’s auto insurance policy has policy limits or coverage limits less than the cost of the injuries you received in the accident.
In such cases, you are unable to get the compensation you are looking for to pay the medical bills. But if you have underinsured motorist coverage, you can draw on the limits of the coverage to compensate for the negligent driver’s policy limits.
But what if you get into an accident with an uninsured motorist? In most cases, you can’t file for third-party claims if the negligent driver is an uninsured motorist. You can personally sue the individual for damages, but often they don’t have financial assets to compensate you for your loss.
To combat such potential issues in the future, motorists get uninsured motorist coverage that gives enough coverage if an individual gets into a car accident due to a negligent uninsured motorist.
Underinsured motorist coverage and uninsured motorist coverage often come as part of auto insurance. However, it is best to read your insurance contract before signing it to know if you have this coverage.
Disputes in Underinsured Motorist Claims and Insurance Coverage
In any insurance or legal dispute, there is an arbitration case. According to California Law, if the insurance company and injured policyholder cannot establish the claim’s value, regardless of whether it is an uninsured motorist or an underinsured motorist claim, the case must go through arbitration.
During this phase, the insured cannot file a lawsuit against the insurer, except in the case of unusual circumstances, since the insurer has already shown their willingness to pay compensation by getting into an arbitration.
This creates the legal argument that the insurer might be acting in bad faith by using tactics to delay claims. In the cases of uninsured or underinsured motorist claims, this argument holds weight as insurance companies often avoid paying such types of claims.
How to Sue an Insurance Company for Bad Faith?
It is a fact that many insurance companies operate for profit and denying claims without a reasonable explanation, by law, is an act of bad faith. Policyholders can hold their insurers responsible for such acts and file for a bad faith claim. However, if the insurer formally instituted arbitration proceedings, you cannot take legal action against the insurer during this phase.
What should you do then? Is this another ploy by these financial institutions?
It’s not fair for the insured to forcefully be part of the arbitration by the insurer in the hopes of avoiding bad faith claims since insurance companies know that the insurer can’t sue them during this stage.
California Insurance Code requires that the arbitration process is complete before the insured can take legal action against the insurance company. However, the code does not allow the insurer to act in bad faith before going into the arbitration process.
About the Insurance Arbitration Process
If you’re a victim of bad faith practices by the insurer before the arbitration process, you can sue the insurer after the arbitration process is complete. Waiting for the results of the arbitration process can help you create your next strategy. The results will also dictate whether there was a case for bad faith insurance practice by giving lowball settlement offers.
A good arbitration award would establish the case for bad faith as the amount of the claim is more than the offer the insurance company gave before the arbitration process. This is because the good arbitration establishes that the value of the claim was much higher than what the insurance company gave before the arbitration, suggesting that the insurer was acting in bad faith.
If the arbitration award is similar to or slightly more than the insurer’s initial settlement offer, then the case for bad faith is challenging or even impossible. A bad faith claim after the arbitration process arising from an uninsured or underinsured motorist can cover a lot of damages, as it now includes attorney fees, court and arbitration fees, and other legal costs.
To recap, an insured can dispute the amount of the claim with the insurer, which can lead to the arbitration process where the arbitrator gets to decide the amount of the claim. During this process, the insured cannot file bad faith claims against the insurer until the process is complete. The results of the arbitration process will dictate whether the insurer was acting in bad faith before this process. If so, the insurer has the legal right to claim damages and the legal fees associated with the case and the arbitration.
If you have a dispute with the insurance company over the claim’s value and are now in the arbitration process, you need to get the proper legal representation. Ehline Law is a personal injury law firm that has expert attorneys with experience dealing with insurers.
How Do I Schedule a Free Consultation To Arbitrate My Uninsured Motorist Claim?
You call us! Our attorneys have won several achievements and awards like Best Trial Lawyers, Best Personal Injury Attorneys, and more, making them a force to reckon with. We are not afraid to take the insurers to court if it means getting you the compensation you deserve.
Contact us at (213) 596-9642 and get a free consultation with a legal expert today. You can even visit our law offices across California to speak to an attorney to discuss your case.
