Insurance Bad Faith Lawyers in New Mexico
What Is Insurance Bad Faith?
Bad faith occurs when an insurance company fails to uphold its obligations under your policy—either by denying a legitimate claim, dragging out the process, or refusing to pay the full amount owed. Under New Mexico law, insurers are required to act reasonably and in good faith when handling claims.
Whether your case involves a homeowners policy, auto insurance, commercial general liability, or another form of coverage, we know how to evaluate and take the claim to trial, if necessary..
Our Insurance Bad Faith Services
We help individuals and businesses when they have to face unreasonable claim handling and contact violations.
Coverage Opinions
Violations of New Mexico’s Insurance Code
Failure to Defend
What is insurance bad faith?
In New Mexico, insurance bad faith occurs when an insurer fails to act in good faith and fair dealing, leading to a breach of the implied covenant in an insurance contract. This can manifest in various ways, including unfairly denying claims, delaying processing without valid reason, or failing to settle claims when liability is clear. Essentially, it's when an insurance company doesn't fulfill its promise of protection and instead acts in its own interest to the detriment of the policyholder.
What is the covenant of good faith and fair dealing?
New Mexico law imposes an implied covenant of fair dealing in all insurance contracts, meaning insurers must act in good faith towards their policyholders
How does an insurance company breach its duty?
An insurer breaches this duty by acting in bad faith, such as denying claims without a valid reason or failing to settle claims when liability is clear.
What are common bad faith tactics?
• Failing to investigate claims properly: An insurance company might delay or fail to thoroughly investigate a claim, hindering a fair settlement.
• Denying or delaying coverage: Unjustly denying or delaying coverage decisions without proper explanation or justification can be considered bad faith
• Lowballing settlement offers: Offering significantly less than the fair value of a claim can indicate an attempt to undermine the policyholder's rights
• Failing to settle when liability is clear: Refusing to settle a claim when it's reasonably clear the insurer is liable can be a sign of bad faith
• Making misrepresentations: Providing false or misleading information about policy coverage or claim decisions can be a form of bad faith.
What are the consequences of bad faith?
Insurance companies can face penalties and legal action for bad faith practices.
What to Do if You Suspect Bad Faith:
• Document everything
• File a formal complaint
• Consider legal action
• Consult with an experienced attorney
What is evidence of bad faith?
Evidence of bad faith can vary widely but typically includes documentation and communication that demonstrate the insurer’s failure to act in good faith. This might include:
Who is Covered Under My Insurance Policy?
The answer depends on the type of insurance policy you have and the policy language. For auto insurance policies in New Mexico, the named insured and household members are usually covered under the policy. If you let someone drive your car, they are usually covered under your policy. If you are riding in a car, and the driver gets in an accident the driver’s insurance policy may provide coverage and you may also be able to rely on the coverage in your own policy.
How to demonstrate bad faith?
To prove bad faith, you will need documentation that the insurance carrier wrongfully denied or delayed your claim, or otherwise acted unreasonably. This could come from letters, emails, telephone transcripts, or other communication with the adjuster, copies of the policy you purchased, and other relevant paperwork.
What damages can be recovered in an insurance bad faith lawsuit?
A plaintiff in an insurance bad faith lawsuit can recover compensation for:
• Damages in excess of the policy limits
• Liability for judgments in excess of the policy limits
• Statutory penalties (i.e. fines required by law)
• Interest
• Damages for emotional distress
• Coverage of economic losses and attorney's fees
• Punitive damages
