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Bad Faith or Bad Luck? A Look at Insurance Agent Negligence

Bad Faith or Bad Luck? A Look at Insurance Agent Negligence

Before you purchase an insurance policy – for your home, your vehicle, your business, etc. – you are supposed to sit down with an agent and go over what that policy entails. You should know what kind of average you have, where the gaps arise, and what incidents will not be covered, at a bare minimum. Insurance policies can be pretty dense, so most policyholders rely on their agents to walk them through the paperwork, and trust them to tell the truth.

Sometimes, though, agents fail in this duty. When they do, you can be adversely affected when you put in a claim. But how do you know if your denied claim is the result of bad “luck,” or the result of bad faith?

If you failed to purchase the right policy or policies, despite your agent advising you otherwise, then your claim will, most likely, be denied rightfully under the law. If, however, your agent breached his or her duty to you, or failed in his or her responsibilities, you may be able to make a bad faith claim based on agent negligence.

What you should know about agent negligence

First and foremost, you should keep in mind that most acts of agent negligence are just that; they’re not born of a malicious attempt to defraud you out of your money. Sometimes, agents make mistakes. But just because an agent made an error, doesn’t mean that you should have to pay for it through a denied claim for your losses.

The other thing you should know is that not all acts of bad faith stem from a negligent agent – even if it appears that they do. For example, an agent who drags his or her feet about returning calls may not be the one holding up the process; a delay could be caused by a claims adjuster, or by some other employee of the insurance firm. While it is rude for a person not to return your calls, it might not be an act of outright negligence, especially if your agent cannot obtain any information his or herself. This is why you want to consult with an insurance dispute attorney if you suspect you are being given the runaround.

Making a claim for bad faith

If you were sold the wrong policy, or given poor advice, or if your policy is never activated, you can make a claim for bad faith. Under Oklahoma law, you may be entitled to compensatory damages for:

  • Your financial losses: from the original claim, from any new losses sustained since the claim was denied, and/or both
  • Embarrassment and loss of reputation
  • Emotional distress
  • Legal fees

You might also be awarded punitive damages, depending on the case.

At Stipe Law, we help policyholders throughout Oklahoma whose claims have been denied because of a negligent agent. To work with an experienced McAlester bad faith lawyer, please call (918) 505-7741 or fill out this contact form.

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