Wisconsin Insurance Claims Denials - Wisconsin Insurance Bad Faith

Consumers purchase insurance to protect themselves if something goes wrong. The following list describes some common types of Wisconsin insurance coverage:

Wisconsin Automobile Liability Insurance Coverage is designed to protect the policyholder if they cause an auto accident.
Wisconsin Automobile Uninsured Motorist Coverage is designed to protect the policyholder if they are injured in a Wisconsin auto accident by a driver that does not have liability insurance coverage.
Wisconsin Automobile Underinsured Motorist Coverage is designed to protect the policyholder if they are injured in a Wisconsin car crash by an individual that does not have an adequate amount of liability insurance.
Wisconsin Automobile Medical Payment Coverage is designed to protect the policyholder up to a certain amount for medical bills incurred as a result of a Wisconsin automobile collision.
Wisconsin Private Disability Insurance is designed to protect the policyholder if they become disabled for any reason under the terms of the policy.
Wisconsin Private Health Insurance is designed to pay medical bills incurred by the policyholder.
Wisconsin Homeowner's Insurance is designed to protect the policyholder from liability if an individual is injured on their property, or in some circumstances even off of their premises.
Wisconsin Umbrella Insurance is designed to protect the policyholder from liability over and above of their homeowner's insurance and/or automobile liability insurance. Also, many Wisconsin umbrella policies offer their policyholder's with Underinsured Motorist Coverage in the amount of their umbrella insurance limits.

Sometimes, insurance companies, in their ever-increasing attempt to decrease payouts and increase profits, fail to timely and sufficiently pay benefits to their policyholders with no reasonable basis for delay or denial. In such circumstances, the insurance company is acting in bad faith.

If you or a loved one have been delayed or denied benefits under a Wisconsin insurance policy, there may be recourse against the insurance company, be sure to contact an experienced Wisconsin Insurance Bad Faith Lawyer.

Wisconsin Insurance Bad Faith Law

Wisconsin recognizes three different types of insurance bad faith claims:

First Party Insurance Bad Faith Claims
Third Party Insurance Bad Faith Claims for Excess Verdicts
Worker's Compensation Bad Faith Claims

First Party Insurance Bad Faith Claims

In order to establish a claim for First Party Insurance Bad Faith in Wisconsin, the policyholder must show that the insurance company did not have a reasonable basis for delay or denial of payment of the claim and they knew of this lack of reasonable basis and/or showed reckless disregard in their delay or denial. The insurance company's actions are compared to what a reasonable insurance company would have done. If, under the facts and circumstances of the case, the insurance company acted consistently with how a reasonable insurance company would have acted, then there will be no bad faith claim. If, on the other hand, the insurance company delays or denies payment of a claim under the policy without a reasonable basis and they were aware they had no reasonable basis for delay or denial, then they are guilty of bad faith.

If an insurance company has committed bad faith, then the policyholder is entitled to the following:

Breach of Contract Damages
Emotional Distress
Future Installments
Attorney's Fees
Punitive Damages

Punitive Damages: Wisconsin courts allow for the award of punitive damages for first party bad faith by an insurance company. Punitive damages are a means to punish and deter an insurance company from future similar bad acts.

Third Party Insurance Bad Faith Claims for Excess Verdicts

In the vast majority of Wisconsin Personal Injury Claims, the insurance company for the person that caused the injuries handles the claim without input from the insured. However, if the value of the claim exceeds the amount of insurance coverage, then the insurance company is required to notify the insured of this possibility. The Wisconsin insurance company has a duty to exercise ordinary care in the handling of the claim. Ordinary care is the exercise of due diligence by the insurance company in all aspects of the claim. The insurance company must specifically do the following in the handling of the claim:

Conduct a reasonable investigation into the facts surrounding the accident and the extent of injuries of the person making the claim against the insurance company. Based upon this investigation, the insurance company should then make a reasonable assessment as to how much money it will eventually have to pay if the case were to go to a trial.
Advise the insured that it is probable the injured person will be awarded more than the available insurance coverage, so that the insured can hire their own counsel if they so choose.
Timely and appropriately inform the insured of all settlement demands, offers and negotiations.

If the insurance company is found to have committed bad faith, then the insured can collect the following:

The Amount of the Judgment in Excess of the Policy Limits
Attorney's Fees and Costs
Expert Witness Fees
Punitive Damages

Worker's Compensation Bad Faith Claims

A Wisconsin company's worker's compensation insurance company that delays or refuses to pay an injured worker can also be found guilty of bad faith. The relevant Wisconsin law provides the following:

If the department determines that the employer or insurance carrier suspended, terminated, or failed to make payments or failed to report an injury as a result of malice or bad faith, the department may include a penalty in an award to an employee for each event or occurrence of malice or bad faith. This penalty is the exclusive remedy against an employer or insurance carrier for malice or bad faith. If this penalty is imposed for an event or occurrence of malice or bad faith that causes a payment that is due an injured employee to be delayed in violation of s. 102.22(1) or overdue in violation of s. 628.46(1), the department may not also order an increased payment under s. 102.22(1) or the payment of interest under s. 628. 46(1). The department may award an amount that it considers just, not to exceed the lesser of 200 percent of total compensation due or $30,000 for each event or occurrence of malice or bad faith. The department may assess the penalty against the employer, the insurance carrier or both. Neither the employer nor the insurance carrier is liable to reimburse the other for the penalty amount. The department may, by rule, define actions which demonstrate malice or bad faith.Section 102.18 Wisconsin Statutes.

Wisconsin Insurance Claims - Denials and Bad Faith