INSURANCE BAD FAITH DEMAND LETTER

State of Alabama

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION - FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER AL RULES OF EVIDENCE AND F.R.E. 408

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [ADJUSTER_EMAIL]

Date: [DATE]

[INSURANCE_COMPANY_NAME]
[CLAIMS_DEPARTMENT_ADDRESS]
[CITY], [STATE] [ZIP]

Attention: [ADJUSTER_NAME], [ADJUSTER_TITLE]
Re: FORMAL BAD FAITH DEMAND - ALABAMA LAW
Insured: [INSURED_NAME]
Claimant: [CLAIMANT_NAME]
Policy Number: [POLICY_NUMBER]
Claim Number: [CLAIM_NUMBER]
Date of Loss: [DATE_OF_LOSS]
Policy Limits: [POLICY_LIMITS]
Response Deadline: [RESPONSE_DEADLINE] (This is a Time-Limited Demand)

Dear [ADJUSTER_NAME]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [CLIENT_NAME] ("our client") in connection with the above-referenced insurance claim arising under the laws of Alabama. This letter constitutes a formal demand for payment of policy benefits wrongfully withheld and serves as notice of [INSURANCE_COMPANY_NAME]'s ("the Company" or "[CARRIER_SHORT_NAME]") bad faith conduct in handling our client's claim under Alabama law.

As a seasoned insurance litigator with decades of experience representing policyholders against major carriers in Alabama, I am well aware of the Company's obligations under Ala. Code Title 27 and Alabama common law. The Company's conduct in this matter constitutes a textbook example of bad faith claims practices that Alabama courts routinely punish with substantial damages.

This is a time-limited demand. The Company has until [RESPONSE_DEADLINE] to tender the full amount owed of $[DEMAND_AMOUNT] and resolve all claims arising from this loss. Failure to do so will result in immediate litigation seeking all available remedies under Alabama law.

II. ALABAMA BAD FAITH LAW

A. Legal Standard

Alabama recognizes a limited tort action for bad faith refusal to pay insurance claims. The insured must prove: (1) an insurance contract; (2) an intentional refusal to pay the claim; (3) absence of any reasonably legitimate or arguable reason for refusal; (4) actual knowledge by insurer of no legitimate reason; and (5) intentional failure to determine whether there was any legitimate or arguable reason. National Security Fire & Cas. Co. v. Bowen, 417 So.2d 179 (Ala. 1982).

B. Available Damages Under Alabama Law

Under Alabama law, our client is entitled to recover:

Compensatory damages for the tort of bad faith, mental anguish, and punitive damages where conduct is sufficiently egregious

C. Punitive Damages Standard

Clear and convincing evidence of oppression, fraud, wantonness, or malice

D. Attorney's Fees

Not generally recoverable absent contract or statute; may be element of bad faith damages

III. POLICY INFORMATION AND COVERAGE

A. Policy Details

B. Coverage Analysis

The policy provides coverage for [DESCRIBE_COVERED_LOSS_TYPE]. The loss clearly falls within the policy's insuring agreement under Alabama law interpretation principles.

[CARRIER_SHORT_NAME] has acknowledged coverage by [DESCRIBE_COVERAGE_ACKNOWLEDGMENT]. Having accepted coverage, the Company is obligated under Alabama law to:

• Conduct a thorough, fair, and objective investigation
• Evaluate the claim in good faith
• Promptly pay all amounts owed under the policy
• Communicate honestly and transparently with the insured
• Avoid unreasonable delays in claim handling
• Refrain from compelling litigation through unreasonable conduct

IV. FACTUAL BACKGROUND AND CLAIM HISTORY

A. The Underlying Loss

On [DATE_OF_LOSS], [DESCRIBE_LOSS_EVENT_IN_DETAIL].

[ADDITIONAL_LOSS_DETAILS]

B. Chronological Timeline of Bad Faith Conduct

V. SPECIFIC BAD FAITH CONDUCT

[CARRIER_SHORT_NAME]'s handling of this claim violates both the express and implied covenants of good faith and fair dealing recognized under Alabama law:

A. Unreasonable Delay

The Company has unreasonably delayed the investigation, evaluation, and payment of this claim in violation of Alabama law:

• [DESCRIBE_SPECIFIC_DELAY_1]
• [DESCRIBE_SPECIFIC_DELAY_2]
• [DESCRIBE_SPECIFIC_DELAY_3]

B. Inadequate Investigation

[CARRIER_SHORT_NAME] failed to conduct the thorough, fair, and objective investigation required under Alabama law:

• [INVESTIGATION_FAILURE_1]
• [INVESTIGATION_FAILURE_2]
• [INVESTIGATION_FAILURE_3]

C. Unreasonable Settlement Offers

The Company's settlement offers have been grossly inadequate:

D. Misrepresentation of Policy Provisions

[DESCRIBE_MISREPRESENTATIONS]

E. Failure to Communicate

[DESCRIBE_COMMUNICATION_FAILURES]

VI. STATUTORY VIOLATIONS

A. Alabama Unfair Claims Settlement Practices Act

[CARRIER_SHORT_NAME]'s conduct violates Ala. Code 27-12-1 et seq., which prohibits:

• Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue
• Failing to acknowledge and act reasonably promptly upon communications with respect to claims
• Failing to adopt and implement reasonable standards for the prompt investigation of claims
• Refusing to pay claims without conducting a reasonable investigation
• Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear
• Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered
• Attempting to settle a claim for less than the amount to which a reasonable person would have believed he or she was entitled
• Failing to promptly provide a reasonable explanation of the basis in the policy for denial or inadequate offer

B. Alabama Prompt Payment Requirements

[CARRIER_SHORT_NAME] has violated Ala. Code 27-12-24 - Claims must be paid within 30 days of proof of loss by:

• [SPECIFIC_PROMPT_PAYMENT_VIOLATION_1]
• [SPECIFIC_PROMPT_PAYMENT_VIOLATION_2]
• [SPECIFIC_PROMPT_PAYMENT_VIOLATION_3]

VII. DAMAGES

A. Contract Damages

B. Consequential Damages

C. Emotional Distress Damages

[DESCRIBE_EMOTIONAL_DISTRESS_IF_RECOVERABLE_UNDER_AL_LAW]

D. Punitive/Exemplary Damages

Under Alabama law, punitive damages require: Clear and convincing evidence of oppression, fraud, wantonness, or malice

The Company's conduct meets this standard because [DESCRIBE_AGGRAVATING_FACTORS].

E. Statutory Penalties

Under Alabama law, our client is entitled to:

[STATE_SPECIFIC_STATUTORY_PENALTIES]

VIII. DEMAND

Based on the foregoing, we hereby demand that [CARRIER_SHORT_NAME]:

A. Monetary Demand

Pay the total sum of $[TOTAL_DEMAND_AMOUNT] as follows:

B. Settlement Terms

In addition to the monetary payment:

• Full and complete release of all claims by [CARRIER_SHORT_NAME] against our client
• Confidentiality agreement regarding settlement terms (optional)
• Correction of any adverse information reported to industry databases

IX. TIME-LIMITED NATURE OF THIS DEMAND

THIS DEMAND EXPIRES AT 5:00 P.M. [TIME_ZONE] ON [RESPONSE_DEADLINE].

Special Note: No specific time-limited demand doctrine like Stowers; standard reasonableness applies

Consequences of Non-Response

If [CARRIER_SHORT_NAME] fails to accept this demand by the deadline:

1. Litigation will be filed immediately in Alabama seeking all available remedies

2. This demand will be withdrawn and our client will seek:
   - Full policy benefits plus prejudgment interest
   - All consequential and emotional distress damages
   - Punitive damages without limitation
   - Attorney's fees and costs
   - All statutory penalties under Alabama law

3. Regulatory complaints will be filed with:
   - Alabama Department of Insurance, P.O. Box 303351, Montgomery, AL 36130
   - National Association of Insurance Commissioners

X. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to preserve all documents and electronically stored information related to this claim, including but not limited to:

• The complete claim file, including all versions and drafts
• All internal communications regarding this claim
• All communications with the insured/claimant
• Adjuster notes, diaries, and activity logs
• All documents received from or sent to the insured/claimant
• All photographs, videos, and inspection reports
• All expert reports, estimates, and evaluations
• Claim handling guidelines, manuals, and procedures
• Training materials relevant to this type of claim
• Reserve information and reserve change documentation
• Supervisor notes and approvals
• Quality assurance or audit reports

XI. CONCLUSION

[CARRIER_SHORT_NAME]'s handling of this claim represents precisely the type of conduct that Alabama bad faith laws were enacted to prevent and punish. We strongly encourage the Company to use this opportunity to resolve this matter fairly under Alabama law.

Please direct all communications regarding this matter to the undersigned.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME]
[BAR_NUMBER]
[ADDRESS]
[CITY], AL [ZIP]
[PHONE]
[FAX]
[EMAIL]

Counsel for [CLIENT_NAME]

ENCLOSURES:
- Policy declarations page
- Relevant policy provisions
- Claim correspondence chronology
- Damage documentation
- Expert reports (if applicable)

CC:
- [CLIENT_NAME]
- Alabama Department of Insurance, P.O. Box 303351, Montgomery, AL 36130 (via complaint filing)

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