Fiduciary And The Duty Of Good Faith
The duty of good faith is a partial sentence taken from the legal term fiduciary, which is used to describe the relationship between two parties either legally or ethically in forming confidence or trust. Where it relates to the duty of good faith is when a policyholder and an insurance company deal with an accident of any kind. Essentially, based on good faith, the insurance company agrees to give a fair assessment of the accident. This then, allows for the policyholder to have a fair opportunity in understanding why their benefits were processed or denied.
In an insurance policy, most people are unaware, that there are certain levels within the contract that are not applied to other contracts. For example, as we noted earlier, the duty of good faith requires that the insurance company, and more importantly the insurance adjuster give you or your loved one involved in an accident a fair assessment. In many cases, because the insurance policyholder doesn’t know that the duty of good faith is in the contract, they are unaware that the insurance adjuster may not be acting properly. However, by contacting a personal injury lawyer in order to properly review your policy, you can assure that the insurance adjuster will be made aware, that he or she must act on good faith.
Under the duty of good faith, it is actually illegal for the insurance adjuster to deny payment or delay on payments. In other words, for no fault accident benefits, whether you were at fault or not, the insurance company must give you benefits to cover the initial costs of your damages. Throughout the history of the insurance industry, it has been rare for insurance adjusters to make their clients aware of the duty of good faith. But once you establish, that the insurance company is acting on bad faith, you may be able to file a lawsuit against them for denying you of your rights. This in turn, can lead to courts filing punitive damages against insurance companies, because they are acting inappropriately.