Vexatious Refusal, Don’t Get It Twisted with Bad Faith - The S.E. Farris Law Firm
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Vexatious Refusal, Don’t Get It Twisted with Bad Faith

Insurance companies are denying claims more aggressively than in years past. Some of these denials are improper, and the insured’s only remedy is to sue the insurer. There’s a clear difference between bad faith and vexatious refusal. Don’t fall victim to vexatious refusal—learn what it is and how The S.E. Farris Law Firm can help.

It can be confusing to navigate your personal injury case, especially when insurance companies play a part. There are more insurance companies acting in bad faith lately, and vexatious refusal claims are on the rise. We’re here to help you understand the difference.

There are two types of claims you can bring against an insurance company. We’ve covered bad faith in the past, which is when a third party is denied their claim within the policy limits of the first party. We see bad faith in car accidents, where Person A is injured by Person B, and even though by law Person B’s insurance company is supposed to cover the damages suffered by Person A, they try to deny a claim or decrease the value of damages.

The second type of claim brought against insurance companies is for vexatious refusal to pay. This is a first-party claim, i.e. when someone brings a claim against their own insurance company. Missouri statutes 375.296 allows for additional damages for vexatious refusal to be paid by the insurance company.

This can be confusing in Missouri because when another person injures you, your remedy comes from suing that person, even though the insurance company defends the claim and ultimately pays it. However, in the eyes of the law (and the jury), it is the other driver who is defending the case. In a first-party case, we sue the insurance company directly, instead of by proxy.

If your insurer refuses to pay for your property loss after a fire or when a vehicle is stolen, for example, the direct first-party action can include penalties and attorney fees that are not typically available in Missouri courts.

Of course, it’s not all black and white. Every refusal to pay isn’t necessarily a vexatious one, if the insurer has a good faith basis to refuse payment.  Vexatious refusal occurs if the insurance company acts without reasonable cause or in a vexatious manner in denying their claim. In this scenario, a jury may find that the insurance company is responsible for penalties and losses in a vexatious refusal to pay the claim.

The laws surrounding bad faith and vexatious refusal are always changing and evolving. It’s important to work with a law firm that is on the top of its game and aware of these changes. Because our law firm has experience with both types of claims,  we can help you navigate your personal injury or property loss claim to make sure you get the compensation you deserve.

If you or a loved one has been in a car accident, contact us today and schedule a free consultation for your personal injury and property damage claim.