It is not unusual for insurance companies to deny claims even when policyholders fulfill their contractual obligations. Unfortunately, some of these companies employ misleading tactics to reject legitimate claims. This unethical behavior is referred to as “insurance bad faith.” Even well-known insurance providers with substantial resources have been known to systematically deny claims or create…
Elements of Privilege In order for attorney-client privilege to apply, these elements must be met: (1.) a client; (2.) a confidential communication; (3.) a communication made for purpose of facilitating rendition of professional legal services to the client; and (4.) a communication made in one of the five relationships enumerated in S.D.C.L. § 19-13-3. State v….
In South Dakota, the eventual payment of a plaintiff’s insurance claim does not extinguish the wholly separate tort claim of bad faith. The South Dakota Supreme Court specifically embraced this principle in Champion v. U.S.F.& G. when it concluded: . . .an insurer’s violation of its duty of good faith and fair dealing constitutes a tort,…
In the guise of “medical cost containment,” insurers have established goals to deny or minimize medical claims. These goals are implemented through medical claim review procedures that are performed either by medical providers, insurance company personnel or third-party vendors. Often, the insurer will order an independent medical examination (IME) that is conducted by a medical…
In South Dakota, an insurance company acts in bad faith when it fails to give equal consideration to the interests of its insured. It is also a basic principle of insurance bad faith law is that an “insured’s interests must be given ‘equal consideration’ with those of the insurer, or as it is often expressed…
There are two different types of evidence in bad faith claims. The first type involves only the actions of the claims personnel and seeks to show that their actions were outrageous and caused damage to the plaintiff. The second type of evidence is called “institutional bad faith.” “Institutional bad faith” is a corporate philosophy, implemented…
Several South Dakota statutes prescribe insurance company responsibilities to insurance claimants. Some of these statutes are: Unfair Trade Practices The Unfair Trade Practices Act, S.D.C.L. § 58-33-67, defines unfair or deceptive insurance company practices in South Dakota. Some unfair or deceptive insurance company practices are: Admissibility In South Dakota, there is no private right of…
In South Dakota, insurance bad faith law is based on the legal principle that there is an implied covenant of good faith and fair dealing in every insurance contract. This covenant prohibits either party from preventing or injuring the other party’s right to receive the benefits of the contract. Trouten v. Heritage Mut. Ins. Co., 632…
As lawyers we see many cases of unfair claim denials by insurance companies. In my work I have reviewed hundreds of claim files and attorney files, and I have had the task of using these documents as exhibits in trial. I often get calls asking for advice on how to best write letters to an…
We all think we know what an insurance bad faith case looks like. Right? Not necessarily. I found out a few years ago that I had no idea what to look for in a bad faith case. I was looking for villainous behavior from claims people that lie, cheat, underpay my client, and then let…
