Insurance Regulators Give Out Fines in New York
Insurancejournal.com reports that several auto insurance companies have been given fines for various violations. One insurance company was charged $360,000 for mischarging customers for auto insurance. An Illinois-based company was fined $136,000 for conducting business without a license. The report states it is the first time New York insurance regulators fined the Illinois-based company. Other fines were given to several companies and many others lost their licenses due to various violations. The report states the fines that were handed out were the highest that have been handed out.
In cases where the customer is affected by the violations committed by the auto insurer, those cases can be constituted as bad faith and can be grounds for a lawsuit. If a company does not pay a claim and completely disregards a customer’s policy, this can be considered bad faith. In addition, overcharging a customer for coverage can also be considered bad faith and customers can file a lawsuit. Bad faith occurs when the policy does not dictate that a claim can be denied for whatever reason the insurer gave the customer.
It can also occur when a company acts recklessly and disregards the customer’s rights in either accepting or denying a claim. Although bad faith claims may sometimes be problematic, if a customer can present evidence that the insurer either acted recklessly or provided a reason for denying a claim that was not part of the policy the company drew up, it can be grounds for a bad faith claim against the insurer.
For more information on insurance bad faith issues, visit Solomon & Relihan's Insurance Information page.
