For a first-party claim, bad faith revolves around the insurance company’s ability to process a claim in a reasonable amount of time. Insurance companies generally argue that their need to conduct an investigation into the claim and obtain a valuation of the claim constitutes a reasonable amount of time. Still, this new legislation levels the playing field a bit more, by putting further responsibility on the insurance giants to timely address these matters involving UM/UIM claims.
Insurers beware, the IFCA also provides that any plaintiff that successfully brings a claim under IFCA shall be entitled to actual damages caused by the violation of IFCA, reasonable attorneys fees and costs, and pre-and post-judgment interest.
Given these new private rights of action, insurance providers would be wise to ensure that their claims-handling guidelines and best practices act in accordance with New Jersey law, and are in compliance with the new rules set forth under the IFCA.
