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Bad faith insurance claims involve allegations that an insurance company unreasonably delayed, denied, undervalued, or otherwise mishandled a valid insurance claim. In Buffalo, New York, these disputes are governed by a combination of private contract law, state statutes regulating insurance practices, and court decisions interpreting insurers' duties. Insureds often assert bad faith when an insurer fails to investigate a claim properly, refuses to pay undisputed amounts, wrongfully denies coverage, or places its own interests ahead of the insureds. Remedies can include recovering the policy benefits, interest, consequential damages, and in some limited circumstances other damages, depending on the claim facts and applicable law.
Insurance claims can be complex - policies use technical language and insurers have teams and processes designed to limit payouts. You may need a lawyer if:
- The insurer has denied coverage or refused to pay a claim that you believe is clearly within your policy.
- The insurer delayed payment or refuses to pay undisputed parts of your claim.
- The insurer misrepresented policy terms or failed to defend or indemnify you in a third-party liability matter.
- The insurer failed to investigate your claim properly or relied on a flawed investigation to deny coverage.
- The insurer lowballed or undervalued your claim and will not negotiate in good faith.
- You face an adverse liability judgment because your insurer refused to defend or settle within policy limits.
- You want to file a regulatory complaint and need help documenting unfair or deceptive practices.
An attorney experienced in insurance disputes can evaluate your policy, gather evidence, identify viable legal claims, explain likely remedies, and represent you in negotiations, administrative complaints, or court.
Bad faith disputes in Buffalo must be considered under New York state law and local court practices. Key points to understand include:
- Contract and implied-duty principles - Insurance policies are contracts. New York law also recognizes an implied covenant of good faith and fair dealing in insurance contracts. That covenant requires insurers to act reasonably and in good faith in administering claims.
- Statutes and regulatory rules - New York regulates insurer conduct through statutes and through the New York State Department of Financial Services, which issues regulations and enforces standards for fair claim handling. The department accepts consumer complaints and can take administrative action against carriers for unfair claim practices.
- Remedies and limitations - In New York, courts have been cautious about awarding tort damages for first-party bad faith. Often an insured will bring a breach of contract claim for unpaid benefits, and may seek extra-contractual relief in limited circumstances. The ability to recover punitive or emotional damages in first-party cases is more constrained than in some other states, but facts that show egregious or intentional misconduct can support additional claims in some cases.
- Statute of limitations - Different legal theories have different time limits. Generally, contract claims in New York are subject to a six-year statute of limitations, while many tort claims carry a three-year statute. It is important to act promptly because missing the deadline can prevent you from pursuing a claim.
- Local courts and procedures - Buffalo litigants use local trial courts, such as Erie County Supreme Court for major civil cases, and city and county courts for smaller matters. Alternative dispute resolution - such as appraisal clauses for property claims, mediation, or arbitration - is commonly used and may be required under a policy.
An insurance bad faith claim alleges that an insurer acted unreasonably or dishonestly in handling a claim - for example, by failing to investigate, denying a valid claim without a reasonable basis, delaying payment, misrepresenting policy terms, or refusing to defend a covered lawsuit. The claim may seek the policy benefits plus additional damages for the insurer's wrongful conduct, depending on the legal theory and facts.
Signs of potential bad faith include: denial without a clear explanation, unexplained or unreasonable delays, refusal to pay undisputed portions, repeated requests for the same information, relying on an inadequate investigation, or ignoring policy language that supports coverage. Documentation of communications, dates, and the insurer's reasoning helps determine whether bad faith occurred.
Keep a copy of your insurance policy and all endorsements, all correspondence with the insurer, claim forms, denial letters, estimates, invoices, photographs, medical records if applicable, witness statements, notes of phone calls with dates and names, and any internal appraisal or investigation reports given to you. These items are critical for proving coverage and the insurer's handling of the claim.
Common remedies include payment of the policy benefits that were wrongfully withheld, interest on overdue payments, consequential economic losses caused by the denial, and in limited situations additional damages for egregious conduct. Attorneys' fees and statutory penalties may be available in certain statutory claims or under specific circumstances. The precise remedies depend on the legal theory and the facts of the case.
Time limits differ by claim. Contract claims are generally subject to a six-year statute of limitations. Torts are commonly governed by a three-year statute. Because courts apply specific rules about when the clock starts running, you should consult an attorney promptly to make sure you do not lose the right to sue.
Yes. New Yorks state regulator - the Department of Financial Services - accepts consumer complaints about insurers. Filing a regulatory complaint can trigger an investigation and sometimes prompt a corrective response. A regulator can help with oversight and consumer protection, but its remedies may be different from what a court can order in private litigation.
You do not strictly need a lawyer to file a regulatory complaint or handle simple matters, but because bad faith litigation can involve technical policy interpretation and complex procedural rules, most people benefit from legal representation. A lawyer can evaluate claims, gather evidence, negotiate with the insurer, and represent you in court or arbitration.
Attorney fee arrangements vary. Many plaintiff attorneys accept bad faith cases on a contingency-fee basis - meaning they are paid a percentage of any recovery - but arrangements can also be hourly or hybrid. In some situations, statutes or contracts allow a prevailing party to recover attorneys' fees from the insurer, but fee-shifting is not automatic in every case.
First-party claims involve benefits owed to the policyholder under their own policy - for example, a homeowner seeking property-damage coverage. Third-party claims involve a third party who suffered harm and seeks payment under someone elses liability policy - for example, an injured person seeking payment from the at-fault driver’s insurer. New York law treats these situations differently, and courts may be more willing to recognize certain extra-contractual claims in third-party contexts.
You should evaluate any settlement offer carefully. Early offers may be reasonable in some cases but may also be attempts to close a claim for less than fair value. Consider the total losses, future expenses, and whether the offer fully compensates you. If you are unsure, consult an attorney who can review the offer and advise whether it is fair or if further negotiation or litigation is warranted.
New York State Department of Financial Services - accepts consumer complaints and oversees insurer conduct and enforcement within New York state.
Erie County Bar Association - can help you locate attorneys experienced with insurance disputes in Buffalo and provide referrals.
Legal Aid organizations in Western New York - may provide assistance or referrals if you qualify based on income or the nature of your case.
Local court clerks - Buffalo and Erie County court clerks can provide procedural information about filing cases, local rules, and small claims procedures.
Consumer protection offices - local government consumer advocates can provide information about filing complaints and understanding your rights.
- Gather and preserve evidence now. Collect all policy documents, correspondence, photos, repair estimates, medical records, and notes of conversations with the insurer. Creating a single organized file will be valuable.
- Document a timeline. Write down dates of loss, claim submissions, responses, phone calls, and any deadlines or requirements stated by the insurer.
- Consider a demand letter. If appropriate, send a written demand to the insurer that explains the claim, attaches relevant documentation, and requests payment by a specific date. An attorney can draft a demand that preserves your legal options.
- File a regulatory complaint if you believe the insurer violated consumer protection rules. That can be done in parallel with legal evaluation.
- Consult an attorney. Meet with a lawyer who handles insurance disputes. Bring your policy and all documentation. Ask about experience with bad faith claims, fee structure, possible remedies, expected timeline, and likelihood of success.
- Be mindful of deadlines. Confirm applicable statutes of limitations and any policy deadlines so you do not lose rights to pursue your claim.
Remember, this guide is informational and not a substitute for legal advice. If you are facing a possible bad faith insurance situation in Buffalo, contact a licensed insurance litigation attorney promptly to discuss the specifics of your case.
