Many car insurance providers frequently dispute auto accident claims and put the recovery process on hold, sometimes for years. The injured party would be forced to spend time pursuing their claim during this delay and would also be denied any possible financial reimbursement for their injury.
In New Jersey, drivers now have the option of suing auto insurance providers who handle their uninsured or underinsured motorist claims in bad faith. New Jersey governor Phil Murphy signed the New Jersey Insurance Fair Conduct Act (IFCA) into law on January 18, 2022.
The new law allows policyholders who have been hurt in a car accident to sue their auto insurance provider if they experience “an unreasonable delay or unjustified denial” of their claims. In essence, the new law gives policyholders the right to sue their insurance provider for behaving in bad faith by ignoring valid claims for their clients. The IFCA is applicable to coverage for uninsured or underinsured motorists.
Under your policy’s Uninsured (UM) /Underinsured (UIM) motorist coverage, also known as “first-party benefits,” you may be able to file a claim against your own car insurance provider if you are hurt in a motor vehicle accident through someone else’s fault and they do not have enough insurance coverage (or, worse yet, none at all) to fairly compensate you for your injuries.
According to the IFCA, your own insurance company must treat your UM/UIM claim honestly, competently, and without undue delay if you file one against them for injuries or damages you have sustained. This insurance is there to protect you in the event that an irresponsible driver causes an accident and does not have enough bodily injury insurance or car insurance to pay for your damages and injuries.
For example, if a person is involved in a serious motor vehicle crash and the other driver’s liability insurance coverage is only $25,000, but the lasting injuries and associated damages exceed that amount, that person must go through their own insurance policy to obtain additional cash to help pay for their severe injuries and damages.
How does the IFCA assist?
The Insurance Fair Conduct Act allows an injured person to sue their own insurance company for UM/UIM benefits if it engages in the following behavior:
- Unreasonably delays the payment of benefits;
- Unreasonably denies a claim for benefits payment; or
- Plainly breaches the New Jersey Unfair Claims Settlement Practice Act, N.J.S.A. 17:29B-4.
If it is determined that an insurance firm violated the Fair Conduct Act as stated above, the insured individual may file for damages which includes:
- Actual damages up to three (3) times the actual policy coverage brought on by the insurance company’s violation of this act;
- Interest before and after the judgment, acceptable attorney fees, and reasonable litigation costs.
The new law, which is seen as a significant success for insurance consumers, helps level the playing field for insured persons who pay their premiums and behave responsibly and now mandates that their vehicle insurance provider likewise conduct its business fairly and responsibly. Insurance companies frequently deny payment of legitimate claims to accident victims or delay paying claims that should be paid. This is wonderful news for drivers in New Jersey whose insurance companies behave dishonestly.
Contact a Skilled Personal Injury Lawyer Right Away
An experienced injury claims lawyer can help you navigate through your insurance company’s maze of delaying tactics and make sure you receive all you are entitled to, or perhaps more.
Call Grossman Law Firm at (732) 625-9494 to schedule a free consultation if you think your insurance company is handling your claims in bad faith after an accident.