Hawaii Bad faith Insurance Attorney:
Foster Law Offices represents clients in claims against the client's own insurance company when the insurance company violates its duty of good faith and fair dealing. Bad faith cases, while difficult to prove, can result in a damages award that may far exceed the underlying value of the personal injury claim upon which the bad faith is based.
Insurance Companies Must Deal In Good Faith In Hawaii:
In Hawaii, insurance companies maintain a duty of “good faith and fair dealing” during the claim process with policy holders. The good faith and fair dealing requirement is a requirement applicable to all contracts. Since an insurance policy is a contract, insurance companies (and policy holders) are required to deal in good faith.
The Hawaii Supreme Court has defined an insurance company's good faith obligations in a case called Best Place v. Penn. Am. Insurance Company as follows:
"There is a legal duty, implied in a first- and third-party insurance contract, that the insurer must act in good faith in dealing with its insured, and a breach of that duty of good faith gives rise to an independent tort cause of action. The breach of the express covenant to pay claims, however, is not the sine qua non for an action for breach of the implied covenant of good faith and fair dealing. The implied covenant is breached, whether the carrier pays the claim or not, when its conduct damages the very protection or security which the insured sought to gain by buying insurance. Best Place, Inc. v. Penn Am. Ins. Co. 82 Hawai‘i 120, 920 P.2d 334 (1996)."
Proving Bad Faith In Hawaii:
In order to prevail on a bad faith claim in Hawaii, the insured person must prove that the insurance company: “fail(ed) to deal fairly and in good faith with its insured by refusing, without proper cause, to compensate its insured for a loss covered by the policy.” The Hawaii Supreme Court cited the following as examples of bad faith:
- Unreasonable delay in payment of benefits
- Decision not to pay a claim based on bad faith
- Failure to properly investigate a claim
Punitive Damages Available In Hawaii Bad Faith Claims:
The Hawaii Supreme Court also authorized punitive damages in successful bad faith cases. Punitive damages are available when the insurance company has “acted wantonly or oppressively or with such malice as implies a spirit of mischief or criminal indifference to civil obligations; or where there has been some willful misconduct or that entire want of care which would raise the presumption of a conscious indifference to consequences."
Although bad faith cases can be difficult to prove, these cases can be difficult for insurance companies because of the potential for a punitive damages award. Since there is no cap on a punitive damages award, there is no way for an insurance company to calculate or protect against its financial risk in these types of cases.
Evidence of Bad Faith:
Bad faith cases can be won or lost based on the amount and accuracy of the written evidence. Letters, emails, appraisals, expert reports and other tangible written evidence are vital to a successful bad faith claim. Phone calls with insurance company adjusters or attorneys, unless recorded with permission of the adjuster/attorney, are not typically useful evidence of insurance bad faith.
Bad Faith Claims Limited to Victim's Insurance Company:
Finally, it is important to remember that bad faith claims are not available when dealing with another person's insurance company, unless the person is an “insured” under the policy. For example, if a car accident victim's personal injury claim is denied by the at-fault driver's insurance company, there is no bad faith claim against the at-fault driver's insurance company. However, if an accident victim makes a claim against his or her own insurance company for PIP, UM or UIM benefits, and the claim is denied in bad faith, the victim may have a bad faith claim against his or her own insurance company.
Contact Foster Law Offices:
If you or a loved one are having difficulty negotiating with an insurance company on a Hawaii personal injury claim or if an insurance company is committing bad faith in its negotiations, please contact us today to schedule a free consultation. To schedule an appointment, please call or text: (808) 348-7800 or if you prefer to submit your inquiry via email please complete the "Contact Our Firm" box to the right. We look forward to speaking with you.