I have reviewed hundreds of claim files and attorney files, and often get calls from policyholder's lawyers asking how to best write letters to an insurer that is committing bad faith. Here are 8 of the most costly mistakes I see lawyers make. MISTAKE NO. 1: Trying to "set up" a bad faith case. Some lawyers think they need to hide the ball and snap the trap before the company gets wise and pays the claim.
ADVICE: The best way to "set up" an insurance company is to give it every opportunity to do the right thing. Give them the facts and the law. If they do the right thing... great. If they ignore you, they do a better job of setting themselves up than you can ever do. The exception is the company is issuing "trial denials," which are then withdrawn as soon as anyone challenges. This calls for a different approach.
MISTAKE NO. 2: Writing nasty letters to the company -threatening to sue for bad faith. When it comes time to try the case, tough talk only hurts the case and makes you look bad.
ADVICE: Forget flamboyance. Be pleasant. Be simple.
MISTAKE NO. 3: Writing long winded letters in a lecturing tone. These make lousy trial exhibits, and diffuse whatever legitimate points you have.
ADVICE: Keep your letters short, to the point, and end by offering whatever help you can give. When you get no response, write again. Three short letters asking for help, all short and to the point, and all ignored by the company, are much better than one long winded one.
MISTAKE NO. 4: Overreaching on the value of the claim. Too many lawyers think their job is to get everything they can, and when they get that, to get some more.
ADVICE: If you can get what is fair, you have done a good job. In trial, the whole story is one of a company that seeks to get every advantage it can over the policyholder. If the policyholder's lawyer is playing the same game with the insurance company, you lose the high ground.
MISTAKE NO. 5: Whining about "my poor client"- using hyperbole.
ADVICE: Bad faith is not about your client, it's about the company. When the typical plaintiff's lawyer whines about "my poor client," it gives the company an excuse to make the case about the client's credibility, and not about the company's credibility. MISTAKE NO. 6: Delaying your response to the company. Insurance companies use delay on a policyholder the same way that you use hot water on a sticky jar lid... to loosen it up. It's hard to complain about delay, though, when the policyholder's own lawyer takes weeks or months to answer letters or provide information.
ADVICE: Never let the ball linger in your court. Get them what they ask for, do it quick, and then ask if they need anything else. Any delay must always come from them.
MISTAKE NO. 7: Failing to ask questions. The insurance company has a duty to provide the insured with full and fair disclosure of the facts and the law on which it bases a denial. Ask them to live up to this duty. They usually fail miserably.
ADVICE: Ask the company for specific facts. What investigation have you conducted? What facts have you uncovered? Who have you interviewed? Will you supply us with copies of your claims file? When there is no basis for the denial, claims handlers almost always refuse to answer questions. That makes powerful evidence later.
MISTAKE NO. 8: Not seeing the "greed" card coming. The defense is always that you and your client are acting out of greed. Don't underestimate it; it gets instant traction.
ADVICE: When appropriate, I have actually written a letter offering to drop the claim if the company is willing to agree to an audit of their claim files in order to correct similar violations against other policyholders. For some reason the company never accepts. Later, when the company plays the greed card, that letter becomes a nuclear weapon. It not only trumps the greed card, it destroys the entire defense. Even if the judge is reluctant to allow the letter into evidence, the threat of opening the door can seriously hamstring traditional defense evidence and arguments.
The more unethical your opponent, the more important it is to stay on the high ground yourself.When the insurance companies refuse to give you what you paid for - Abourezk Law will be there. Our lawyers that handle insurance bad faith will help make sure you get the claim you're entitled to. Visit online for more information.
