“The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, their providers, and their representatives, rests the duty of preserving inviolate the integrity of insurance.” RCW 48.01.030.
Yet, we also all know one basic truth about insurance companies; they want to pay as few claims as possible and as little as possible.
Last time I looked, Allstate was the largest publicly traded home and auto insurer. In an article from July 31, 2012, The Wall Street Journal reported that Allstate “spent 86.3 cents on claims and expenses for every dollar it collected in premiums across its property-casualty segment.” The goal of Allstate, and every other insurance company, is to drive down that 86.3 cent figure as low as possible to maximize profits. How do insurance companies reduce their exposure? Anderson Cooper reported, “its the three Ds: delay, deny, and defend”.
None of this is surprising. However, most people find that a personal injury insurance claim brought by a customer of the insurance company against their own policy should be investigated and evaluated differently than a claim against someone else’s policy.
In other words, if you pay premiums for years and have a covered loss, most people will say that claim should be treated better than how we are used to being treated by other people’s insurance. Claims against your own insurance policy are called first party claims. Claims against someone else’s policy are called third party claims.
An example of a first party claim would be if you were rear-ended by an uninsured driver and you brought an uninsured motorist claim against your own insurance company to pay for your medical treatment, injuries, and damages. Other examples would be a homeowner’s claim in the situation of fire damage. A third party claim is one brought against someone else and that other person’s insurance policy.
Washington State agrees. In Washington, insurance companies have to treat their customers better than how they treat other people. They may not always make the distinction, but that is what the law requires. Washington’s regulations are in the Washington Administrative Code, and one such insurance regulation adopted by the insurance commissioner says:
“WAC 284-30-395 Standards for prompt, fair and equitable settlements applicable to automobile personal injury protection insurance. The commissioner finds that some insurers limit, terminate, or deny coverage for personal injury protection insurance without adequate disclosure to insureds of their bases for such actions”.
This is a finding of Washington’s insurance commissioner that insurance companies sometimes under-explain their denials of claims for medical benefits to their customers. There are many regulations in Washington that insurance companies fought tooth and nail to stop that require good faith and fair dealing with respect to the investigation, evaluation, and adjusting of first party claims. If an insurance company treats its customers unfairly in Washington, there is a good chance that a claim for bad faith and violation of the Insurance Fair Conduct Act can be brought.
Are you facing a situation in which you believe your insurance company is not treating you with the good faith required by law? Speak with one of our lawyers to help discern what to do next. We’d love to be your resource.