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August 29, 2017

The Insurance Industry Quick-Hit Settlement

If you’ve been in a collision and it was someone else’s fault, odds are very good that you will hear from the at-fault driver’s insurance company as soon as possible. It’s a tactic that is happening more and more in Arizona. This is done for a variety of reasons: (1) the insurance company would like […]


Phoenix Insurance Bad Faith Attorney Discusses INSURANCE BAD FAITH DAMAGES

Experienced Phoenix insurance bad faith attorneys like Shane L. Harward will seek different kinds of damages from the insurance company that acted in bad faith. If you are considering legal action against your insurer for bad faith intentional claim denial, unreasonable delay or nonpayment on a claim, and so on, then this article is for you.

In today’s post we’ll talk about the types of damages you may expect to recover in a bad faith insurance lawsuit: contract based damages, emotional distress damages, punitive damages, and attorneys’ fees.


Arizona Revised Jury Instructions (Civil) Fourth Edition – Insurance Bad Faith




Duty of Good Faith and Fair Dealing In Insurance Policy

There is an implied duty of good faith and fair dealing in every insurance policy.

To prove that an insurance company breached the duty of good faith and fair dealing, the insured must prove: (1) the insurance company intentionally denied the claim, failed to pay the claim, or delayed payment of the claim without a reasonable basis for such action; and (2) the insurance company knew that it acted without a reasonable basis, or the insurance company failed to perform an investigation or evaluation adequate to determine whether its action was supported by a reasonable basis.



Measure of Damages For Insurance Company’s Breach of Duty of Good Faith and Fair Dealing

If you find that the insurance company is liable to their insured for breaching the duty of good faith and fair dealing contained within the insurance policy, you must then decide the full amount of money that will reasonably and fairly compensate the insured for each of the following elements of damage proved by the evidence to have resulted from the insurance company’s breach of the duty of good faith and fair dealing: (1) The unpaid benefits of the policy; (2) Monetary loss or damage to credit reputation experienced and reasonably probable to be experienced in the future; and (3) Emotional distress, humiliation, inconvenience, and anxiety experienced, and reasonably probable to be experienced in the future.


●  Contract Based Damages – Unpaid Benefits Of The Policy and more

The plaintiff (insurance consumer) who is successful in a lawsuit against the defendant insurance company can recover the benefits under the policy terms. These damages have their legal basis in breach of contract. The insurance policy is contractual in nature and binds the parties, the insurance consumer (who pays the premiums) and the insurance company (who provides benefits on the occurrence of certain events). The plaintiff can also recover losses that were a consequence of the insurer’s bad faith claim denial. These consequential damages are considered foreseeable, meaning the insurer should have anticipated that the insured would suffer these consequences when it breached the policy agreement and failed to pay on a claim.


●  Emotional Distress, Humiliation, Inconvenience, and Anxiety Damages

Recovery for emotional distress has its basis in tort law or personal injury law. Inconvenience, suffering, humiliation, anxiety, and mental pain associated with a substantial invasion of the insured’s property interests characterize emotional distress insurance damages. The plaintiff insurance consumer can recover emotional distress damages when his or her property rights were interfered with as a result of the insurance company’s bad faith failure to pay on the owed insurance benefits.


●  Punitive Damages

As with emotional distress, recovery for punitive damages has its basis in personal injury law. These damages go to the issue of a intentional bad faith breach of the insurer’s covenant of good faith or the insurance company’s conscious disregard of harm to an insurance consumer. Punitive damages are meant to punish and deter future instances of such bad faith behavior. As Phoenix insurance bad faith attorneys know, it takes more than simple negligence or failure to investigate the claim on the part of the insurer to prevail on a claim by the insured for punitive damages. But when the insurer was motivated by evil intent to cause harm to the insured, knew that it was creating a substantial risk of harm to the insured, had reckless, conscious disregard for the insured, or was overtly dishonest or fraudulent, among other things, then punitive damages may be awarded.


●  Attorneys Fees

The statute controlling the recovery of attorneys fees on contested insurance contract claims is A.R.S. § 12-341.01. As applied to lawsuits to recover from acts of bad faith by an insurer, the plaintiff (insurance consumer) may seek to recover the costs of hiring an attorney when the insurer unreasonably withheld benefits under an enforceable insurance policy.


At the Law Offices of Shane L. Harward, our insurance bad faith attorney represent clients throughout Phoenix and its surrounding Arizona communities including Tempe, Mesa, Scottsdale, Chandler, Peoria, Glendale, and Paradise Valley, to name only a few. When you need a strong legal advocate – when you want to know what kinds of damages your case may involve – call 480.874.2918 or email us for a free confidential telephone consultation.

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  • Shane Harward Law Offices of Shane L. Harward PLC

    10575 North 114th Street
    Suite 103
    Scottsdale, Arizona 85259

    Telephone 480-874-2918
    Facsimile 480-588-5063

    By Appointment Only:
    4809 East Thistle Landing Drive
    Suite 100
    Phoenix, Arizona 85044

    Telephone 602-384-4638

    Mailing Address:
    Post Office Box 12877
    Scottsdale, Arizona 85267