What if the Insurer Uses “Bad Faith” Tactics in a Mississippi Car Crash Case?

The moments following a car crash are filled with confusion and stress. Beyond the physical injuries and vehicle damage, you are thrust into a process you never asked to be a part of—dealing with insurance companies. You trust that the insurer will honor its obligations and treat you fairly. Unfortunately, that trust is sometimes misplaced. When an insurance company unreasonably denies, delays, or underpays a legitimate claim, it may be acting in “bad faith.”

What is an Insurance Company’s Duty of Good Faith and Fair Dealing?

In Mississippi, every insurance policy contains an unwritten, implied promise known as the “covenant of good faith and fair dealing.” This is a legal principle that requires an insurance company to act fairly and honestly when handling a claim. They cannot put their own financial interests ahead of their obligation to investigate and pay a valid claim.

This duty means the insurer must:

Conduct a prompt and thorough investigation of the claim.
Objectively evaluate all available evidence.
Communicate with you in a timely and transparent manner.
Make a reasonable settlement offer based on the facts and the policy coverage.
Provide a clear explanation for any denial of a claim, referencing specific policy language.

When an insurer fails to meet these standards without a legitimate or arguable reason, its actions may constitute bad faith. This is not simply a matter of disagreeing over the value of a claim; it involves conduct that is unreasonable and intentional.

What Are Common Examples of Insurance Bad Faith?

Bad faith can manifest in many ways. Insurance adjusters may use a variety of tactics designed to minimize payouts or frustrate you into accepting an unfairly low settlement. Recognizing these behaviors is the first step toward protecting your rights.

Some common bad faith tactics include:

Unreasonable Delays: The company intentionally drags out the investigation or payment process for months without a valid reason, hoping you will give up or accept a lower amount out of desperation.
Inadequate Investigation: The adjuster fails to gather key evidence, such as interviewing witnesses, obtaining the police report, or consulting with medical professionals, leading to an unfair assessment of your claim.
Denial Without Explanation: The insurer denies your claim without providing a legitimate, specific reason based on the facts or the language in the insurance policy.
Lowball Settlement Offers: The company offers a settlement that is far below the actual value of your damages, knowing that your medical bills, lost wages, and other losses are much higher.
Misrepresenting Policy Terms: The adjuster intentionally misleads you about what your policy covers or what the at-fault party’s policy limits are.
Refusing to Defend a Lawsuit: In a third-party claim, the insurer refuses to provide a legal defense for their policyholder when the claim falls within the scope of the policy’s coverage.
Making Threatening Statements: An adjuster might try to intimidate you by threatening legal action or suggesting you are attempting to commit fraud without any basis for the accusation.
Demanding Excessive and Unnecessary Paperwork: The company buries you in burdensome and repetitive requests for documentation as a way to delay or discourage your claim.

What is the Difference Between First-Party and Third-Party Bad Faith?

In Mississippi, bad faith claims are generally categorized as either “first-party” or “third-party.” The type of claim you have depends on your relationship with the insurance company.

First-Party Bad Faith Claims

A first-party claim is one you make against your own insurance company. For example, if you are making a claim under your own Uninsured/Underinsured Motorist (UM/UIM) coverage or MedPay coverage, you have a direct contractual relationship with the insurer. If they unreasonably deny or delay payment on your valid claim, you may have a first-party bad faith case against them. The core of the case is the breach of their contractual and implied duties owed directly to you, their policyholder.

Third-Party Bad Faith Claims

A third-party claim is one you make against the at-fault driver’s insurance company. In this scenario, you do not have a direct contract with the insurer. Because of this, Mississippi law makes it more difficult to bring a direct bad faith claim against the other party’s insurer. Generally, an insurer’s primary duty is to its own policyholder.

However, an insurer can still act in bad faith in a third-party context by, for example, unreasonably refusing to settle a claim within policy limits when liability is clear. This can expose their own policyholder to a large judgment. While the path to a third-party bad faith claim is more complex, it is not impossible under certain circumstances, and an attorney can evaluate if the insurer’s conduct gives rise to such a claim.

What Evidence Helps Prove a Bad Faith Insurance Claim?

To succeed in a bad faith lawsuit, you must prove more than just a denied claim. You need to show that the insurance company had no “arguable or legitimate reason” for its actions. This requires collecting and preserving substantial evidence that demonstrates the insurer’s unreasonable conduct.

Key evidence often includes:

The Insurance Policy: A complete copy of the policy outlines the insurer’s contractual obligations.
Written Communication: Keep a detailed record of all letters, emails, and text messages between you and the insurance company. This creates a timeline and documents their responses (or lack thereof).
Notes from Phone Calls: After every phone conversation with an adjuster, write down the date, time, the adjuster’s name, and a summary of what was discussed. Follow up with a confirmation email to create a written record.
The Police Report: The official accident report provides an initial account of the crash and may indicate clear fault.
Medical Records and Bills: These documents establish the extent of your injuries and the financial costs you have incurred.
Proof of Lost Wages: Documentation from your employer showing the time you missed from work and the income you lost is vital.
Repair Estimates: Itemized estimates from reputable body shops document the cost of your property damage.
Witness Statements: Independent accounts of the accident can corroborate your version of events and establish clear liability.

An experienced attorney can also obtain internal documents from the insurance company through the legal discovery process, such as the adjuster’s claim file notes, internal emails, and company training manuals, which can sometimes reveal an intentional strategy to deny or underpay the claim.

What Damages Are Available in a Mississippi Bad Faith Lawsuit?

If you successfully prove that an insurer acted in bad faith, you may be entitled to recover damages beyond the initial value of your car accident claim. The goal of a bad faith lawsuit is to compensate you for all the harm caused by the insurer’s wrongful conduct.

Potential damages can include:

Contractual Damages: This is the original amount the insurance company should have paid on your car accident claim.
Consequential Damages: These are the additional financial losses you suffered as a direct result of the bad faith conduct. This could include things like attorneys’ fees incurred to collect the claim, lost interest, or even damage to your credit rating.
Emotional Distress: The stress, anxiety, and frustration caused by an insurer’s bad faith actions can be significant. In some cases, you may be compensated for this emotional harm.
Punitive Damages: In cases of particularly egregious or malicious conduct, Mississippi courts may award punitive damages. These are not intended to compensate the victim but rather to punish the insurance company for its wrongdoing and deter it and other companies from engaging in similar behavior in the future. Awards for punitive damages are reserved for the most serious cases of bad faith.

What Steps Should I Take if I Suspect Bad Faith?

If you believe an insurance company is handling your claim improperly, it is important to take proactive steps to protect your rights. How you respond to their tactics can have a major impact on the outcome.

Review Your Policy: Read your insurance policy carefully to make sure you have a clear picture of your coverages, duties, and the insurer’s obligations.
Communicate in Writing: Shift all important communication to writing. If you have a phone call, send a follow-up email summarizing the conversation. This prevents misunderstandings and creates a paper trail.
Do Not Give a Recorded Statement Without Counsel: An insurance adjuster may ask you to provide a recorded statement. Their goal is often to ask leading questions and lock you into a version of events that could weaken your claim. You should not agree to this without first speaking to an attorney.
Organize All Your Documents: Maintain a file with all crash-related documents, including the police report, medical records, bills, photos, and all correspondence with the insurer.
Do Not Sign Anything Prematurely: Do not sign any releases or settlement agreements until you are certain the offer covers all of your past, present, and future damages. Once you sign a release, you generally cannot seek further compensation.
Consult with an Experienced Attorney: If the insurer denies your claim, makes an unreasonably low offer, or engages in prolonged delays, it is time to seek legal advice. An attorney can assess the situation, determine if the insurer is acting in bad faith, and advise you on the best path forward.

Have You Been Treated Unfairly by an Insurer in Mississippi?

Dealing with the aftermath of a car accident is difficult enough without having to fight an insurance company that refuses to act fairly. If you or a loved one has been injured and you believe an insurer is using bad faith tactics to avoid paying your claim, the team at Reeves & Mestayer is here to help. We are dedicated to holding insurance companies accountable and fighting for the full compensation our clients deserve. We have the resources and knowledge to analyze your case, investigate the insurer’s conduct, and build a powerful claim on your behalf.

We invite you to contact us for a free, confidential consultation to discuss your situation. Call us today at 228-374-5151 or reach out to us online to learn how we can assist you.