Bad Faith Claims Following Catastrophic Injury Cases in New York City

Catastrophic injuries can produce enormous medical expenses, permanent disabilities, lost income, and long-term care needs. When an insurance company has an opportunity to resolve a claim within available policy limits but refuses to do so, fighting back is the only option.

Insurance disputes following catastrophic accidents can also become complicated because the injured person may be dealing with multiple insurance policies, multiple defendants, and insurers focused on limiting their financial exposure. Insurance companies bet on families being too overwhelmed to battle insurance companies. At Lipsig, Freund & Wisell, our New York City personal injury attorneys take over, fighting for the maximum compensation your loved one is entitled to.

What is an Insurance Bad Faith Claim?

Bad faith claims can arise when an insurer fails to protect its insured’s interests while handling a claim. New York courts have recognized that an insurer may face bad faith allegations when its conduct demonstrates a deliberate or reckless disregard for the insured’s interests. Simply put, insurers are supposed to put the insured’s interests before their own; when there is evidence that they haven’t, that’s bad faith.

Why Are Catastrophic Injury Cases Different?

A serious accident can create damages that are difficult to calculate immediately. A victim may require surgery, rehabilitation, home modifications, assistive equipment, or lifelong medical care.

Consider a New York City pedestrian who suffers a spinal cord injury after being struck by a vehicle. The initial medical bills may be substantial, but the future costs can be much greater. The injured person may never return to the same occupation and may require continuing treatment for decades.

An insurance company may focus on the policy limits and its own financial exposure. The injured victim and the insured, however, may face consequences that continue long after the claim is resolved.

When Can an Insurer’s Conduct Raise Bad Faith Concerns?

Every insurance claim is different, and not every disputed or denied claim constitutes bad faith. Courts examine the circumstances surrounding the insurer’s handling of the claim.

Potential concerns can include:

• Failing to give reasonable consideration to a settlement opportunity
• Ignoring evidence demonstrating the severity of the injury
• Delaying meaningful settlement discussions
• Failing to evaluate the likelihood of an excess judgment properly
• Prioritizing the insurer’s financial interests over those of its insured

New York Insurance Law also addresses unfair claims settlement practices. The New York Department of Financial Services states that insurers must not engage in certain unfair practices, including knowingly misrepresenting pertinent coverage information and failing to attempt prompt, fair, and equitable settlements when liability has become reasonably clear.

However, an alleged violation of insurance regulations does not automatically create a private bad faith lawsuit. The legal theory and available remedies depend heavily on the facts and the relationship between the parties.

Contact Lipsig, Freund & Wisell to Fight for What You Deserve

Catastrophic injuries can affect nearly every part of a victim’s life. When insurance disputes complicate an already difficult situation, understanding the available legal options becomes important.

Lipsig, Freund & Wisell has fought back against insurance companies on behalf of countless New Yorkers throughout Manhattan, Brooklyn, Queens, the Bronx, and Staten Island.

If you or someone you love suffered a catastrophic injury in New York City, contact our firm or call (212) 285-3300 to schedule a free consultation.