What You Need to Know About an Insurance Bad Faith Expert
Dealing with insurance is always complicated, and there are times when the insurance company will not act as it should. Here is everything you need to know about an insurance bad faith expert.
Bad faith insurance is when an insurer attempts to go back on their promises and obligations to clients. At times where bad faith occurs, it is important that individuals go to court to get the justice and care that they deserve. Oftentimes in bad faith court cases, plaintiffs will use insurance bad faith experts to discuss their professional opinion on whether the practices used by the insurance company meet or fall below the standard of care or the practice of the industry.
Related: How to Sue an Insurance Company: What You Need to Know
What Is Bad Faith Insurance?
Bad faith insurance refers to an insurer’s attempt to go back on their obligations to clients, either through refusal to pay a policyholder’s legitimate claim or failure to investigate and process a policyholder’s claim within a reasonable period. Insurance companies act in bad faith when they misrepresent an insurance contract’s language to the policyholder to avoid paying a claim, when they fail to disclose policy limitations and exclusions to policyholders before they purchase a policy, or when they make unreasonable demands on the policyholder to prove a covered loss.
Bad faith insurance can apply to any type of insurance policy—including homeowners’ insurance, health insurance, auto insurance, and life insurance—and any type of contract. State laws that specifically address bad faith practices, also called unfair claims practices acts, are meant to protect consumers against malicious behaviors by insurance companies. California law is a model for many other states’ bad faith laws.
What Qualifies an Insurance Bad Faith Expert, and Do You Need One?
A witness is qualified as an expert if he or she has the requisite knowledge, skill, experience, training, or education. Experience working in the insurance industry is commonly offered as the premier qualification for an insurance bad faith expert who plans to testify on the typical practice of insurers in handling claims. Within the insurance industry, a wide variety of specific experiences may or may not suffice, depending on the subject matter on which the expert is offered.
While there are statutes that control the relationships between insurance companies and policyholders, various parties have different interpretations of what is termed “good faith”. Contract law might limit the ability of claimants to recover any amount above actual losses, civil infringement actions allow claimants to recover additional damages when the court rules that the insurance companies fail to act in good faith.
Depending on the facts of the case, it may be enough to simply cross-examine the insurance company witnesses as to the standards that a reasonable insurer must apply when adjusting a claim. However, in complex cases where the plaintiff can afford an expert, it might be worth the cost to hire one. During any trial or litigation, the testimony given by an insurance bad faith expert witness can significantly impact the outcome of a case. Insurance can be complicated, and attorneys, claimants, and insurance company representatives might need insurance bad faith expert witnesses who are reliable authorities on specific topics. This is especially true for complex areas of insurance, such as insurance litigation.
Requirements for Admissibility of Expert Testimony
Under California Evidence Code 801, there are three basic requirements for the admissibility of expert opinion testimony:
- The subject matter of the expert’s testimony must be sufficiently beyond the common experience of the average person such that the opinion could assist the jury and/or Judge,
- The witness must have sufficient knowledge, skill, experience, training, or education to qualify as an expert on the subject, AND
- The opinion must be based on reliable matters.
Expert opinion is not permitted to be used in court when the subject matter is “one of common experience,” as jurors do not need help arriving at a conclusion for these cases. The cases where experts can be used must be cases where the subject matter would not be known by the average person. Expert opinion is also not allowed when the issue is a matter of law. In bad faith cases, it is imperative to remember that an expert cannot testify about whether or not the insurance company acted in “bad faith” or whether a punitive damage award is proper. Any testimony discussing this will be excluded, as these are legal issues that the expert cannot speak on. However, the expert may testify that a particular insurer’s practices fall below the standard of care or the custom and practice of the industry.
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