Bad Faith Insurance Practices You Should Look Out In Your Injury Case

Personal injuries can be life-altering events. If they occur, seeking the guidance of a personal injury lawyer in Calgary should be a priority. These legal professionals are well aware of personal injury law. They help victims navigate the complexities of the legal system to ensure they receive fair and just compensation for their injuries.  

Regrettably, bad faith insurance practices can significantly disrupt the claim process. This practice refers to the deliberate denial of a legitimate claim by an insurance company. This unethical behaviour can arise in various types of insurance, which affects both individuals and businesses.  

Bad Faith Insurance in Personal Injury Cases

Despite the principles of fairness and justice, bad-faith insurance practices can complicate personal injury claims. Bad Faith Insurance must act reasonably and fairly in processing, investigating, or paying out a legitimate claim. This can include deceptive practices, unreasonable delays, and unjust claims denials.

Middler v. State Farm Insurance Companies

Here’s a summary of the Middler v. State Farm Insurance Companies case from the United States District Court for the District of Colorado.

Ronald Middler, a 25-year veteran at State Farm Insurance, raised serious concerns in 1993. He reported a demotion and exposed unethical practices within the company. At State Farm, a special unit called the SIU focused on claims from lower-class minorities. These claims often faced delays, with settlements usually offered late and below their true value, sometimes just before trial. The SIU frequently let claims stall, with many ending without payment.

The unit kept track of savings from these bad-faith tactics, often by intentionally delaying claims. Middler’s revelations highlighted State Farm’s malpractices, including discrimination, claim delays, document destruction, and prioritizing profit over fair client treatment. This case casts a spotlight on the dubious practices prevalent in American insurance companies.

This is a bad-faith insurance case for several reasons:

  • Discrimination: State Farm was said to target claims from lower-income minorities unfairly.
  • Unfair Handling: Their Special Investigation Unit (SIU) delayed investigations on purpose to deny claims.
  • Inadequate Settlements: The SIU gave settlement offers much lower than the actual damage value.
  • Termination of Claims: More than half of the claims the SIU handled ended with no payout at all.
  • Profit Motivation: SIU prioritized maximizing profits over fulfilling obligations to policyholders, as seen in their tracking of money saved through bad faith tactics.
  • Document Destruction: There’s evidence of wrongdoings like destroying documents, which makes the claims process less transparent and trustworthy.
  • Whistleblower’s Testimony: Ex-employee Ronald Middler showed clear evidence of State Farm’s bad practices, where they cared more about profits than their customers’ needs.

Examples of Bad Faith Insurance Practices 

Bad faith insurance tactics involve dishonest dealings by insurance companies. Here are simple examples to help you spot if your insurer is doing in bad faith:

  1. Denying Claims Without Explanation

When your insurance claim is denied, you deserve to know why. If your insurer denies a valid claim without providing any reason, or if the reason seems invalid, it could be a case of bad faith. Consulting an insurance bad-faith lawyer in Calgary is necessary in such situations. 


If your car insurance refuses to cover a valid claim for accident repairs and doesn’t give a reason, it could be an instance of bad faith.

  1. Incomplete Investigations

Your insurance company should quickly and thoroughly investigate your valid claims. If they don’t, it might be considered bad faith. 


If your home insurance company checks your fire damage, agrees it happened but rejects your valid claim without properly investigating the fire’s cause or your policy, this might be bad faith.

  1. Lowballing Settlement Offers

Insurance companies sometimes give policyholders less money than they deserve for their claims. When an insurance company intentionally offers a very low amount to a policyholder, it’s considered bad faith.


After a car accident, a person’s vehicle sustains significant damage. Despite their insurance policy clearly covering the cost of repairs, the insurance company offers only a fraction of the repair expenses.

  1. Delaying or Denying Decisions

Insurance companies understand the importance of timely action in personal injury cases, especially those resulting from vehicle accidents. If you file a claim for necessary compensation for your injuries, and your insurance company excessively delays their decision or unreasonably denies your claim without justification, it could be considered bad faith.


Following a car accident, a person sustains injuries and seeks compensation for their pain and suffering. They file a claim with their insurance company for this compensation. However, after an extended period, the insurance company neither approves the claim nor provides a valid reason for denial, which leaves the injured party without the deserved compensation.

  1. Refusal to Pay Valid Claims

If you make a valid claim to your insurance company and they refuse to pay or settle it, they might be acting in bad faith. Insurance is a contract; if the company doesn’t meet its obligations, it could be held responsible for breaking the contract.


An auto insurance company refuses to cover the costs of injuries from a car accident, despite the injuries and the accident scenario being covered under the policy.

  1. Threatening Statements

An insurance company should never threaten a policyholder. If your insurance company threatens you, contact a lawyer specializing in bad faith insurance.


After filing a claim for injuries sustained in a vehicle accident, a policyholder is accused of exaggerating or fabricating their injuries by their auto insurance company, which then threatens legal action or police involvement.

  1. Misrepresenting Law or Policy Terms

If your insurance company gives you wrong information about the law or your policy and denies a valid claim based on this, you might have a claim against them for bad faith. Insurance companies are supposed to be truthful about the law and your policy.


An insurance company tells a policyholder they could be guilty of insurance fraud for a simple mistake on a claim, like getting a phone number or address wrong.

  1. Prioritizing Profits Over Claims

Insurance companies shouldn’t skip paying a policyholder’s valid claim just to make more money. Tactics like offering too little money or wrongly denying valid claims could be considered bad faith.


An auto insurance company denies a valid claim for significant car repairs after an accident to cut costs, despite the policy covering such damages.

  1. Delayed Payment of Valid Claims

Insurance companies shouldn’t take too long to pay valid claims. If your insurance company delays payment for your valid claim, you should talk to a bad-faith insurance lawyer about your rights.


An auto insurance company approves a verified claim for car repairs but only sends a check to the policyholder or repair shop for three months.

  1. Ignoring Reasonable Documentation Requests

If you ask your insurance company for documents supporting their decisions, they must give them to you. They shouldn’t refuse to provide your policy or other important documents to deny your claim.


The life insurance company won’t give the person the documents they used to deny the claim, even though they asked for them.

Get Immediate Response From Calgary Personal Injury Lawyers

If you’ve experienced any of the following:

  • Unreasonable Delays
  • Underestimating Damages
  • Unjust Denials
  • Biased Investigations
  • Failure to Communicate

Personal Injury Law

Personal injury law covers situations where someone is hurt because of another person’s carelessness or deliberate actions. This includes motor vehicle accidents, medical malpractice, wrongful death, and serious personal injuries. Victims may pursue a personal injury claim when such incidents occur to seek compensation for their losses, including lost wages and pain and suffering.

The Role of Personal Injury Lawyers

Calgary is home to a passionate group of personal injury lawyers who strongly fight for the rights of accident victims. These legal professionals work tirelessly to ensure their clients’ best interests are represented. They offer sound legal advice and pursue fair compensation through negotiation or litigation.

Key Areas of Personal Injury Law

Serious Injuries Personal injury lawyers handle cases involving serious injuries. These include severe traumatic brain injuries, broken bones, and catastrophic injuries that have a profound impact on the victim’s life.
Medical Malpractice Injury lawyers assist victims in overseeing the legal process to seek compensation for the harm caused by medical professionals.
Psychological Injuries Emotional and psychological injuries resulting from accidents or negligence are also within the purview of personal injury law.

The Importance of Fair and Just Compensation

Seeking fair and just compensation is a cornerstone of personal injury law, as victims aim to recover physically and financially from the consequences of an accident. Insurance companies provide financial support to cover property damage and other losses.

Proper Compensation

Personal injury lawyers advocate for proper compensation. This ensures that victims receive an amount that reflects the full extent of their injuries and damages.

Fair Settlements

Negotiating fair settlements with insurance companies is an important aspect of the legal process, which ensures that victims are not shortchanged.

You Deserve A Just Compensation

Contact a professional personal injury lawyer in Calgary for a free consultation today. Sidhu Personal Injury Law Firm Calgary has combined experience navigating the intricacies of personal injury litigation. We work passionately to ensure our clients receive the financial compensation they deserve.

Don’t let unfair insurance practices derail your recovery—call us now and let us help you seek justice. We specialize in motor vehicle accident and provide legal representation in serious personal injury. Our team deeply understands the challenges posed by serious personal injuries and insurance companies involved. 

If you’ve been involved in a hit and run accident, our experienced attorneys are here to assist you. Trust our injury law firm to fight for your rights.

Frequently Asked Questions

  • Note down your concerns and complaints in writing to your claims handler. Support your points with documents, like past emails or receipts related to your claim.
  • Share the details of your complaint with your state’s Department of Insurance. They might investigate, and if your insurer is at fault, they could face fines or penalties.
  • Talk to a lawyer who understands your state’s laws. They can guide you on necessary legal actions, such as taking the matter to court. 

A bad-faith insurance lawyer can assist you in getting your money back. If the insurance company acted carelessly, you may get up to $100,000 or the amount of your actual damages.

A settlement in Calgary personal injury cases is an agreement reached outside of court, providing control and quicker resolution. A trial verdict is a decision made by a judge or jury in court, often involving more time, cost, and potential for appeal.

Contingency fees in Calgary personal injury cases mean clients don’t pay upfront. Lawyers are paid only a percentage of the compensation if they win the case. If there’s no recovery, clients owe no fees. Clients may still be responsible for case expenses.

To prepare for your first meeting with a personal injury lawyer in Calgary, follow these steps:

  1. Bring any relevant documents, including accident reports, insurance policies, and correspondence with insurance companies.
  2. Make a list of questions and concerns you have about your case, your rights, and the legal process.
  3. Prepare a timeline of events related to your injury, including dates of the accident and any communication with insurance companies.
  4. Bring your insurance policy details and any denial letters or settlement offers you’ve received.
  5. If there were witnesses to the incident, jot down their names and contact information if possible.
  6. If your injury affected your employment, bring information about your job, income loss, and disability benefits.
  7. Document any expenses incurred due to your injury, such as transportation costs, prescriptions, or home modifications.
  8. Think about the questions you want to ask the lawyer about their experience, fees, and the potential outcome of your case.
  9. Be prepared to discuss the lawyer’s fees, whether they work on a contingency basis, and any potential costs.
  10. For identification purposes, have a valid ID, such as a driver’s license or passport.