Auto Insurance Policies: Knowing Your Duties & Dealing with Bad Faith Situations

Under your automobile insurance policy, you have to fulfill a variety of duties. These duties include the following:

1) cooperating with your automobile insurance company and assisting with your claim;

2) sending your automobile insurance company any legal papers you received relating to your claim;

3) having a physical examination with a doctor that your automobile insurance company chooses at their expense if they ask you to do a physical examination;

4) allowing your automobile insurance company permission to obtain your medical and other records; and

5) requiring you to provide prompt notice of your accident including the time, place, and circumstances of the accident, and the names and addresses of any injured persons and witnesses no matter who is at fault.


If you are in an accident, you must gather all of the necessary evidence that includes obtaining as many witness names and addresses as possible, contacting the police and filing an accident report, taking photographs of the damage to your vehicle, obtaining medical treatment as soon as possible, and taking down as many notes about the accident as possible.


Ohio law provides standards that your insurance company must follow to ensure prompt, fair, and equitable settlements for your automobile claim. An insurer which elects to designate a specific repair shop must require the damaged automobile to be restored in its condition prior to the accident. All partial losses shall be settled using a written estimate prepared for an insurer. The insurer shall supply the claim and a copy of the estimate upon which the proposed settlement is based.

When your automobile insurance company totals the loss of your automobile vehicle, your insurance company must pay you on the basis of the actual cash value to replace your automobile with another vehicle of like kind and quality. An insurer which elects to offer a replacement vehicle shall provide a vehicle by the same manufacturer, of the same year and similar body style, and with similar options and mileage. In addition, the insurer must attest that the automobile is available for inspection within a reasonable distance of your residence and must pay you for all applicable taxes, license fees, and all other incidental fees. Finally, they must document the offer to replace your automobile.

Any cash settlement to you shall be based on the actual cost to purchase a comparable vehicle less any applicable deductible amount contained in your policy. The settlement value may derive from the average cost of comparable vehicles in your local market area.

What is Bad Faith?

Your automobile insurance company is required to comply with Ohio Administrative Code Section 3901-1-54. This section of the Ohio Administrative Code prohibits unfair property casualty claim settlement practices. Your automobile insurance company acts in bad faith when it fails to comply with these settlement practices.

The unfair property casualty claims settlement practices that must be followed include the following:

1) an insurer should fully disclose to 1st party claimants all pertinent insurance benefits, coverages, or other provisions of the insurance contract;

2) no agent shall willfully conceal from 1st party claimants benefits, coverages, or other provisions of an insurance contract;

3) no insurer shall deny a claim based on a failure of a 1st party claimant to give written notice of a loss within a specified time limit unless notice is required by a policy condition;

4) an insurer shall acknowledge the receipt of a claim within 15 days of receiving such notification. An insurer may satisfy this requirement by making a payment within 10 days. The insurer may also satisfy this requirement by providing the necessary claim forms and instructions to you;

5) an insurer shall respond within 15 days to any communication from a claimant when that communication suggests a response is appropriate; and

6) an insurer shall within 21 days from receipt of a properly executed proof of loss decide whether to accept or deny a claim.

In order to pursue a claim for bad faith, you must show that your automobile insurance company did not have a reasonable basis for denying your claim. If you are still wondering about your duties to the insurance company, The Law Office of Tom Somos, LLC can help.

Feel free to contact our office with questions.

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