What Constitutes Bad Faith Insurance Coverage Under New York Law?

In the aftermath of an auto accident, one of the first questions that enters many drivers’ minds is, “Who is going to pay for this?”Under New York law, motorists are required to carry auto insurance that covers a minimum of $25,000 for bodily injury to one person, $50,000 for bodily injury to all persons, and $10,000 for property damage in any one accident. This means that in the vast majority of circumstances, one or more insurance companies will have an obligation to pay out for coverage following a crash. Because it is in the financial best interests of the insurance company to pay out as little money as possible, the temptation arises for these insurance companies to address the claims and benefits of their policyholders in bad faith.To prove that an insurer acted in bad faith, the policyholder must establish that “the insurer’s conduct constituted a ‘gross disregard’ of the insured’s interests – that is, a deliberate or reckless failure to place on equal footing the interests of its insured with its own interests when considering a settlement offer[.]” For example, the following conduct all may independently be enough to constitute a violation of the duty to act in good faith under New York law:

  • Willfully or intentionally denying that a valid claim is covered under the policyholder’s plan
  • Failing to conduct a reasonable investigation before denying a policyholder’s claim
  • Failing to reach a fair and equitable settlement when liability is apparent or the probability of a verdict in favor of the plaintiff is high

Insurers may also be acting in bad faith if they offer a settlement that is contrary to the agreed upon contract, if they force the policyholder to commence a lawsuit to obtain benefits, or if they willingly or knowingly cause an “excessive delay” in satisfying their obligations under the policy. Because bad faith claims all fall under breach of contract, New York law allows for a bad faith claim to be made up to 6 years following the insurer’s initial denial of benefits.

What Should You Do If I Have to File an Insurance Claim?

If you have to file an insurance claim for any reason, you should speak to an attorney to guarantee that you receive benefits in accordance with the terms of your plan. An attorney can explain to you what sort of benefits you should expect and can advocate for you on your behalf if your insurer fails to provide those benefits. Call us now at (845) 303-2748 to schedule a free consultation.

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Motorcycle Accident
Our client was driving a motorcycle to work when she struck a pothole with her front tire causing her to lose control and impact a guardrail.
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Tractor Trailer Accident
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Our client fell through a floor.
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Bicycle Accident
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Propane Explosion
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A 15-year-old student was injured when she was caused to trip in gym class suffering an injury to her hip which required a replacement.
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Negligence
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Car Accident
Our client was traveling alone in her car when a man operating a pickup truck on behalf of a major auto parts retailer fell asleep at the wheel and crashed into her head-on.
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Car Accident
Attorney Derek J. Spada secured a $2 million settlement in a case involving a client injured in a car accident. The successful resolution highlights Spada's expertise in personal injury law and his commitment to obtaining justice for his clients.
$1.9 Million
Improper Discharge from the E.R.
A 20-year-old was improperly discharged from an emergency room.
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Slip & Fall
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Untimely Diagnosis
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$1.45 Million
Workplace Trial Verdict
New York City Police Officer attacked on the job.
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Farm Accident
A Greene County man sustained a serious injury while working on a farm.
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Birth Injury Caused by Car Accident
Our client’s mother went into premature labor after being struck by a commercial truck; the infant suffered catastrophic injuries.
$1.2 Million
Car Accident
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Pedestrian Hit By Driver
Highest jury verdict in Ulster County in 2021. A driver struck a pedestrian in a wheelchair knocking him over and causing his head to strike the pavement.
$1 Million
Tractor Trailer Accident
Kingston man seriously injured in a tractor-trailer workplace accident.
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Improper Kidney Removal
Maureen Keegan recently negotiated a $1 million settlement in a medical malpractice lawsuit involving a woman who suffered the removal of her healthy kidney when a doctor mistook a benign growth for cancer.
$1 Million
Drunk Driver Car Accident
Our client was a passenger in a van traveling on the NYS thruway. The van was struck in the back at a high-rate speed and our client was thrown from the van and run over by another vehicle.
$1 Million
Assault
A patron at a motel was injured when he intervened to break up a sexual assault in an adjoining room.
$1 Million
Death Caused by Medical Malpractice
$995,000
Medical Malpractice
Confidential case.
$950,000
Car Accident
A 33-year-old woman was rear-ended by the defendant’s car. She sustained severe neck injuries.
$945,000
Labor Law Violation: Roofing Accident
Our attorney proved that the employer violated multiple Labor Laws and Industrial Codes.
$900,000
Car Accident
A 19-year-old was hit while driving.
$825,000
Medical Malpractice Wrongful Death
This tragic case centered on the harmful side-effects of antidepressant drugs leading to suicide.
$790,000
Tractor Trailer Accident
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Nursing Home Neglect/Wrongful Death
$700,000
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Construction Site Accident
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$690,000
Workplace Accident
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$675,000
Wrongful Death
Eli B. Basch represented the family of a woman who suffered from the negligence of a home healthcare aide.
$650,000
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Our client suffered several injuries which required surgery when struck by someone who was distracted by their cell phone and made a left-hand turn from the inside lane.
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Defective Ventilation System
A family of four spent a night at a motel. While they were sleeping, their rooms filled with carbon monoxide due to a defective air ventilation system.
$570,000
Slip & Fall
A Kingston, NY woman who was injured after tripping and falling in the parking lot of a Lake George motel was awarded $570,000 following a six-day jury trial in Ulster County Supreme Court.
$560,000
Slip & Fal
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$555,000
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Traumatic Brain Injury
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Car Accident
$325,000
Slip & Fall
$310,000
Supplemental Underinsured Motorist Claim
$305,000
Slip & Fall
$300,000
Medical Malpractice

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