Frequently Asked Questions About Insurance Bad Faith and Wrongful Denial of Benefits Issues

What can I do if my claim for insurance coverage under my homeowner’s, life, disability, health, fire or flood policy is wrongfully denied?

Under South Carolina Contract Law, an insured person under an insurance policy, whether it be life insurance, health insurance, disability insurance, fire insurance or flood insurance, is entitled to reasonable, prompt, and efficient handling of his or her claim for benefits. If the insurance company wrongfully denies payment of a legitimate claim, the insured is entitled to bring a law suit directly against the insurance company for all benefits due and owing under the contract of insurance. In some circumstances, the insured may also recover attorney’s fees and the reasonable cost of bringing an action against the insurance company.

If the insurance company denies an insurance claim without any justification or subjects its insured to outrageous treatment, the insured may have a claim for what is known as “bad faith,” If bad faith is proven, the insured party may be able to recover not only the benefits owed under the contract of insurance but also attorney’s fees, the cost of bringing the law suit against the insurance company, reasonable compensation for the outrageous behavior, and punitive damages, which are designed to punish the conduct of the insurance company.