What if the Insurer Uses Bad Faith Tactics in a South Carolina Car Crash Case

What if the Insurer Uses “Bad Faith” Tactics in a South Carolina Car Crash Case?

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A serious car crash in South Carolina can turn your life upside down in a matter of seconds. Beyond the immediate shock and pain, you are suddenly faced with a mountain of medical bills, the stress of a damaged vehicle, and the inability to work and earn a living. You pay your insurance premiums faithfully, trusting that your provider—or the at-fault party’s—will be there to honor their obligations when you need them most.

Unfortunately, that trust is sometimes misplaced. While many insurance claims are handled properly, some insurers engage in questionable tactics designed to protect their profits at the expense of injured people. When an insurance company unreasonably denies, delays, or underpays a valid claim, it may be acting in “bad faith.”

What Is Insurance Bad Faith?

When you purchase an insurance policy, you are entering into a contract. In every insurance contract in South Carolina, there is an unwritten, implied promise that the insurance company will act in good faith and deal fairly with you, its policyholder. This is often referred to as the “implied covenant of good faith and fair dealing.”

This means the insurer has a duty to investigate your claim properly, evaluate it honestly, and pay what it owes in a timely manner. Insurance bad faith occurs when a company breaches this duty without a reasonable basis for its actions. It is more than just a simple disagreement over the value of a claim; it is a form of misconduct where the insurer puts its own financial interests ahead of its legal and ethical obligations to the policyholder.

A bad-faith claim is a separate legal action from your original car accident claim. It directly challenges the insurance company’s conduct during the claims process itself.

Is a Denied Claim the Same as Bad Faith?

This is a point of frequent confusion. An insurance company has the right to deny a claim if it has a legitimate, reasonable basis for doing so. For example, if evidence clearly shows their policyholder was not at fault for the accident, or if the specific injury is not covered under the policy terms, a denial would likely be considered reasonable.

A disagreement over the facts or the value of a claim does not automatically equal bad faith. The key difference lies in the insurer’s conduct and justification. Bad faith enters the picture when the denial is unreasonable, arbitrary, or based on a failure to properly investigate.

  • Reasonable Denial: The insurer investigates, finds credible evidence that your injuries were from a pre-existing condition not aggravated by the crash, and denies the claim based on that evidence.
  • Potential Bad Faith: The insurer ignores medical records from your treating physician, refuses to consider evidence you provide, and denies the claim without conducting a meaningful investigation, hoping you will simply give up.

What Are Common Examples of Bad Faith Tactics?

Insurance companies may use a wide range of strategies to unfairly minimize or deny what they owe. Being able to recognize these tactics is the first step in protecting your rights. Some common examples include:

  • Unreasonable Delays: The company intentionally drags out the investigation process for months without a valid reason, hoping to wear you down financially and emotionally so you will accept a lower settlement.
  • Inadequate Investigation: The adjuster fails to interview key witnesses, ignores physical evidence, or refuses to review all of your medical records before making a decision on your claim.
  • Misrepresenting Policy Terms: An adjuster may lie about what your policy covers or twist the language of the policy to justify a denial.
  • Making Unreasonably Low Settlement Offers: The company offers a settlement that is far below the actual value of your claim, knowing your medical bills and lost wages are much higher. This is a common tactic used on injured individuals without legal representation.
  • Refusing to Provide a Reason for Denial: The insurer denies your claim but refuses to provide a clear, written explanation detailing the specific reasons for the denial.
  • Making Threatening Statements: An adjuster might threaten you with legal action or tell you that your claim will be denied entirely if you hire an attorney.
  • Altering a Policy After a Claim is Made: In rare cases, a company might attempt to change the terms of a policy retroactively to avoid covering a claim.
  • Using Biased Medical Examiners: The insurer may require you to attend an “Independent Medical Exam” (IME) with a physician who is known for consistently producing reports that favor the insurance company, regardless of the claimant’s actual condition.

How Does South Carolina Law Address Insurance Bad Faith?

South Carolina law provides protection for consumers against unfair practices by insurance companies. The state recognizes a distinct cause of action, known as a “Tyger River” claim, which allows a policyholder to sue their own insurance company for acting in bad faith when handling a first-party claim (like a claim under your own uninsured or underinsured motorist coverage).

To succeed in a bad-faith lawsuit, you generally need to prove three things:

  • The existence of a binding insurance contract between you and the insurer.
  • The insurer’s refusal to pay benefits due under that contract.
  • The refusal was in bad faith, meaning the insurer had no reasonable basis to support its denial of benefits.

If an insurer is found to have acted in bad faith, it can be held liable not only for the benefits it should have paid in the first place but also for additional damages.

What Steps Should You Take if You Suspect Bad Faith?

If you believe an insurance company is not treating you fairly after a car wreck, your actions can have a significant effect on the outcome. It is important to be proactive and methodical.

  • Document Everything: Keep a detailed log of every interaction with the insurance company. Note the date, time, name of the person you spoke with, and a summary of the conversation.
  • Communicate in Writing: Whenever possible, communicate with the adjuster via email so you have a written record of their statements and your requests. If you must have a phone call, send a follow-up email summarizing the key points of the discussion.
  • Do Not Sign Anything Without Legal Review: Never sign a release or accept a check without fully appreciating what rights you may be giving up. Insurers may try to trick you into settling for a low amount.
  • Request a Written Denial: If your claim is denied, insist on receiving the denial in writing with a full explanation of the reasons, referencing the specific policy language they are relying on.
  • Gather Your Own Evidence: Keep copies of all your medical bills, repair estimates, photos of the accident scene, and contact information for any witnesses.
  • Consult with an Experienced Attorney: The most effective step you can take is to discuss your situation with a lawyer who has experience handling car accident and insurance bad faith cases in South Carolina.

How Can You Prove an Insurer Acted in Bad Faith?

Proving that an insurance company acted in bad faith requires more than just showing that your claim was denied. You and your attorney must build a case that demonstrates the insurer’s actions were unreasonable and that they knew or should have known there was no legitimate basis for their conduct.

Evidence used to build a bad faith case can include:

  • The Insurer’s Claim File: Your attorney can obtain the insurance company’s internal file on your claim through the discovery process. This file may contain adjuster notes, internal memos, and communications that reveal their true reasons for a denial or delay.
  • Correspondence: All letters and emails between you and the insurance company can establish a timeline and show a pattern of unreasonable behavior.
  • Recorded Statements: Transcripts of any recorded statements you gave can be compared against the adjuster’s final report to find mischaracterizations.
  • Expert Testimony: Your legal team may hire insurance industry professionals to review the handling of your claim and testify that the company’s actions deviated from standard industry practices.
  • Evidence of Company Policies: Discovery might uncover internal company policies or incentive programs that encourage adjusters to deny or undervalue claims, which can be powerful evidence of systemic bad faith.

What Damages Can Be Recovered in a Bad Faith Claim?

If you successfully prove that an insurer acted in bad faith, you may be entitled to recover damages beyond the original value of your car accident claim. These damages are intended to compensate you for the harm caused by the insurer’s misconduct and to punish the company for its behavior.

  • Contract Damages: This is the full amount of the benefits that the insurance company should have paid under the policy for your injuries, medical bills, lost wages, and other losses from the car crash.
  • Consequential Damages: These are damages for additional financial losses you suffered as a direct result of the bad faith denial. For example, if the failure to pay your claim caused you to default on your mortgage, lose your vehicle, or ruin your credit, those losses could be recoverable.
  • Punitive Damages: In cases of particularly willful or reckless misconduct, a South Carolina court may award punitive damages. These are not meant to compensate you for a specific loss but are intended to punish the insurance company and deter it and other insurers from engaging in similar conduct in the future.

Navigating the Complexities of a Bad Faith Claim

Pursuing a bad faith claim against a powerful insurance corporation is a complex and challenging endeavor. These companies have vast legal resources and will vigorously defend their actions. The process involves intricate legal arguments, detailed analysis of insurance law, and a thorough command of litigation procedures.

An attorney with a deep familiarity with South Carolina insurance law can level the playing field. They can handle all communications with the insurer, gather the necessary evidence through legal discovery, retain qualified experts, and build a compelling case to demonstrate the company’s misconduct. Whether through aggressive negotiation or presenting your case to a jury, a skilled lawyer can advocate for your rights and fight for the full compensation you deserve.

Contact Peake & Fowler for Help with Your Car Crash Claim

If you have been injured in a car accident in South Carolina and feel the insurance company is giving you the runaround, do not face them alone. The team at Peake & Fowler has extensive experience guiding clients through the claims process and fighting back against the tactics insurers use to deny fair compensation. We are here to protect your rights and help you secure the resources you need to move forward.

To discuss your situation and learn more about your legal options, contact us online or call us at 803-788-4370 for a consultation.