Bad faith occurs when an insurance company unreasonably denies, delays, or underpays your valid Missouri car accident claim without proper justification.
This means the insurer is not treating you fairly or honestly during the claims process, violating their legal duty to handle your case in good faith.
Understanding these practices helps you recognize when an insurance company is taking advantage of your situation.
This article explains what constitutes bad faith in Missouri car accident claims, the difference between first-party and third-party bad faith, warning signs to watch for, and what you can do to protect your rights and recover additional compensation.
Examples of Insurance Companies Acting in Bad Faith
Missouri law requires insurance companies to deal with you in good faith. They must investigate your claim promptly, communicate clearly, and pay what they owe under your policy. When they fail to do this, it’s called acting in bad faith.
A low settlement offer by itself isn’t bad faith. The insurance company’s actions must be unreasonable or dishonest, not just the result of tough negotiation. They need to have a valid reason for denying or reducing your claim.
Here are clear examples of bad faith behavior:
- Denying valid claims: Refusing to pay when your policy clearly covers the damage
- Unreasonable delays: Taking months to investigate a simple claim without a good reason
- Lowball offers: Offering $5,000 when your medical bills alone are $30,000
- Ignoring evidence: Refusing to consider police reports, medical records, or witness statements
How Does Missouri Law Treat Bad Faith and Vexatious Refusal?
Missouri protects you from unfair insurance practices through the duty of good faith and fair dealing. This legal rule means your insurance company must treat you fairly throughout the claims process.
When your own insurance company refuses to pay without reasonable cause, it’s called vexatious refusal to pay under Missouri law. This applies to claims like uninsured motorist benefits or medical payments coverage. If you prevail in a vexatious refusal action, you can recover attorney’s fees plus up to 20% of your claim as a penalty.
Third-party bad faith is different. This happens when the at-fault driver’s insurer refuses to settle within the policy limits. If they reject a reasonable settlement demand and you later win a larger judgment, their insured driver could be personally responsible for the excess amount.
Missouri’s Unfair Claims Settlement Practices Act lists prohibited insurance company behaviors. However, this law doesn’t give you the right to file a private lawsuit. You must pursue bad faith claims under other legal theories.
First-Party vs Third-Party Bad Faith in Missouri Auto Claims
First-party bad faith involves your own insurance company. Third-party bad faith involves the other driver’s insurer. Understanding this difference helps you know what rights you have.
With first-party claims, you’re dealing with an insurance company that owes you benefits under your policy. Common issues include denied uninsured motorist claims, delayed medical payment coverage, or undervalued collision claims.
Third-party claims involve the at-fault driver’s insurance company. They don’t owe you a duty of good faith directly. However, they do owe their own insured a duty to protect them from excess judgments.
Common First-Party Issues with UM, UIM, MedPay, and Collision
Your auto policy includes several types of coverage designed to protect you. Uninsured Motorist (UM) coverage pays when the at-fault driver has no insurance. Underinsured Motorist (UIM) coverage applies when the at-fault driver’s limits are too low.
Medical Payments (MedPay) coverage pays your medical bills regardless of who caused the crash. Collision coverage pays to repair or replace your vehicle. Insurance companies sometimes act in bad faith when handling these claims.
Common bad faith tactics include:
- Unnecessary medical exams: Requiring multiple examinations to delay your UM claim
- Wrong legal standards: Claiming you’re not “legally entitled” to benefits you clearly deserve
- MedPay delays: Refusing to pay no-fault medical coverage promptly
- Vehicle undervaluation: Offering far less than your car’s actual value
When Does Failure to Settle Within Limits Become Bad Faith?
Insurance companies must protect their policyholders by settling reasonable claims within policy limits. When they refuse to do this, they risk exposing their insured to personal liability.
Consider this example: You’re seriously injured by a drunk driver with $25,000 in coverage. You may have sustained substantial damage. You demand that the full $25,000 policy limit be settled.
If their insurer rejects a reasonable settlement demand and you later obtain a judgment that exceeds the policy limits, the at-fault driver can be held personally liable for the excess amount.
This failure to settle within limits can give the insured driver a bad-faith claim against their own insurance company. In some cases, you might be able to get an assignment of this claim as part of your settlement.
Signs an Insurer May Be Acting in Bad Faith
Recognizing bad faith early helps protect your rights and strengthen your case. Insurance companies use various tactics to avoid paying fair compensation.
Watch for these warning signs:
- Excessive delays: Taking more than 30 days to acknowledge your claim or to investigate without good reason
- Adjuster shuffling: Constantly changing adjusters, so you have to restart the process repeatedly
- Irrelevant document requests: Asking for your complete medical history for a simple injury claim
- Misrepresenting the law: Telling you that Missouri doesn’t allow pain and suffering recovery
Other red flags include refusing to explain their decision, denying obvious coverage, or pressuring you to accept a quick settlement. Trust your instincts if something feels wrong about how they’re handling your claim.
When a Low Offer Crosses the Line
Insurance companies often start with low settlement offers. This normal negotiation tactic becomes bad faith when they ignore clear evidence of your damages.
For example, you might have significant medical bills and lost wages that the insurer’s low offer doesn’t fully cover. The insurer made a settlement offer. If an insurer does not increase its offer after you submit documentation of your expenses and provides no explanation, consider consulting our experienced Missouri auto accident attorneys. This unreasonable position could indicate bad faith.
The key is whether they have a legitimate reason for their low valuation. If they can’t explain their reasoning or resort to insurance company tactics that ignore obvious evidence, their offer may cross into bad-faith territory.
What to Do if You Suspect Bad Faith
Acting quickly when you suspect bad faith can protect your rights and strengthen your case. Insurance companies count on people not knowing how to respond to their unfair tactics.
Take these immediate steps:
- Document everything: Save every email, letter, and note from phone conversations with the insurance company
- Get written explanations: Ask them to explain in writing why they denied or undervalued your claim
- Avoid quick settlements: Don’t sign releases or accept payments that might waive your bad faith rights
- Contact our attorneys: Bad faith cases require specific legal knowledge and experience
The insurance company hopes you’ll give up or accept their unfair offer. Don’t let them pressure you into making decisions that hurt your case.
Steps to Protect Your Claim
Follow this process to build a strong record for your potential bad faith case:
- Stop phone conversations: Put all communication in writing to create a clear paper trail
- Collect your evidence: Gather medical records, bills, photos, and witness statements
- Send formal demands: Some bad-faith claims require written demand letters before filing suit
- Track deadlines: Missouri’s five-year statute of limitations applies to most injury claims
- Get legal help: An experienced attorney knows how to handle insurance company tactics
Don’t try to handle a suspected bad-faith case alone. Insurance companies have teams of lawyers and adjusters working against you to minimize settlement offers. You need someone on your side who understands their tactics.
Damages You Can Recover in a Missouri Bad Faith Case
Bad faith claims allow you to recover more than just your original car accident damages. These additional recoveries punish the insurance company and deter future misconduct.
You may be able to recover:
- Original claim value: The economic damages and other benefits they should have paid from the start
- Attorney’s fees: The insurance company pays your legal costs
- Vexatious refusal penalty: Up to 20% of your claim as a penalty.
- Interest payments: Money earned on withheld benefits
- Excess judgments: Amounts above policy limits in third-party cases
- Punitive damages: Additional punishment for especially bad conduct
The exact damages depend on your specific case and the type of bad faith involved. First-party claims against your own insurer typically offer different remedies than third-party cases.
How We Build and Prove Bad Faith in Auto Claims
At Beck & Beck Missouri Car Accident Lawyers, we’re the only firm in Missouri focusing exclusively on auto accident law. We have extensive experience confronting insurance companies and understand their tactics.
Our approach to bad-faith cases includes a thorough review of all claim communications and internal insurance company documents to gather the evidence needed to prove your case. We work with experts who understand industry standards for claim handling.
When insurers fail to meet these standards, we can prove their conduct was unreasonable.
We make strategic settlement demands that create bad-faith exposure for insurance companies. They know we’re prepared to take cases to trial when they won’t negotiate fairly. Our experience recovering compensation for clients demonstrates that we get results.
You pay nothing unless we win your case. We advance all costs and handle every aspect of your claim. Insurance companies know we mean business when we take a case, especially when they’ve wrongfully denied insurance claim benefits.
Act Fast for Help with Unfair Claim Practices
Missouri law sets strict deadlines for bad faith claims. Don’t let the insurance company run out the clock on your rights. The sooner you act, the better we can protect your interests.
We’re available 24/7 for free consultations about your claim. You won’t pay any upfront fees or costs. As a family-run firm, you’ll get personal attention from experienced attorneys who understand your situation.
We have convenient locations throughout Missouri to serve clients statewide. Call us today or contact us online to review your claim for free. Let us explain your rights and help you fight back against unfair insurance practices.
Bad Faith in Missouri Car Accident Claims FAQs
Can I Sue the Other Driver’s Insurer for Bad Faith if I Am the Injured Person?
You typically cannot sue the at-fault driver’s insurance company directly for bad faith in Missouri. However, if you obtain a judgment that exceeds their policy limits, you may receive an assignment of the insured’s bad faith claim against the company.
Is a Low Settlement Offer by Itself Considered Bad Faith in Missouri?
A low offer alone doesn’t prove bad faith in Missouri. The insurance company must act unreasonably by ignoring clear evidence of your damages or refusing to provide valid reasons for their low valuation.
What Is Vexatious Refusal to Pay and What Penalties Apply?
Vexatious refusal occurs when your own insurance company denies your claim without reasonable cause. Missouri law allows you to recover attorney’s fees and up to 20% of your claim value as a penalty under this statute.
Do Missouri Unfair Claims Settlement Rules Give Me a Private Lawsuit Right?
No, Missouri’s Unfair Claims Settlement Practices Act doesn’t create a private right to sue. You must pursue bad faith claims under common law theories or the vexatious refusal statute instead.
What Deadlines Apply to Bad Faith Claims in Missouri?
Contract claims against your own insurer generally have a 10-year statute of limitations in Missouri. Tort-based bad faith claims typically fall under the five-year personal injury deadline, so consult an attorney about your specific situation.
What Evidence Helps Prove an Insurer Acted in Bad Faith?
Key evidence includes all correspondence with the insurer, internal claim files, recorded statements, and documentation showing they ignored evidence supporting your claim. Expert testimony on industry claim handling standards also strengthens your case.
How Much Does It Cost to Hire Beck & Beck for a Bad Faith Claim?
We handle all cases on a contingency basis, meaning you pay no attorney’s fees unless we win. We advance all case costs, so you never pay anything out of pocket to pursue your bad faith claim.
