In most insurance contracts, which include a guarantee of legal protection, both in specific industries and in home insurance against many risks or in car insurance, which include this guarantee, there is a clause according to which, even when it is a case when legal assistance is covered by the contract , after the case has been evaluated by the insurance company or when the out-of-court procedures have been completed, the organization may notify the insured that the claim is considered unreasonable or unreasonable. Among other reasons, due to the lack of sufficient evidence to make it viable, or to consider a claim that is clearly disproportionate to the assessment of the damage suffered.
In these cases, the company refuses to provide legal assistance, and it is usually established that, nevertheless, the insurance company will incur payment of expenses upon request if the insured takes legal action and receives a decision favorable to his interests or compensation in an amount similar to yours initial claim. The Supreme Court ruling was announced on these points. In accordance with the criteria set out in the aforementioned decision, a clause that allows the insurer to assess the viability of a claim by refusing to protect the interests of its insured if it considers the claim to be impracticable or reckless and, therefore, reimburse the costs of the claim only if the insured demanded independently and received a favorable result, it should be considered valid. Nevertheless, as indicated in the aforementioned decision, and in order to avoid abuse and violation, this clause must be interpreted reasonably and “in case of general conditions, in cases of doubt extremely favorable for the consumer, so that the clause does not hide from arbitrary behavior”.
Brownsville law specialists. When, in the case of a claim, the insurer decides to refuse to provide legal assistance because it is considered unfeasible, he accredits in detail and justifies the reason why he describes the claim as unfeasible or reckless, but it is not enough that he informs only the insured. that the company considers its claim reckless, giving it freedom of action. In each case, and depending on the terms of the insurance contract, the policyholder will be informed whether he has the right to apply to arbitration to resolve this dispute. In the event that he is given freedom of action, the organization will inform the insured in each case whether the expenses will be reimbursed upon request up to the limit stipulated in the contract, or if this reimbursement is due to the result being more beneficial for your interests.
The inclusion in the terms of an insurance contract of a transfer clause in arbitration is considered good practice. The inclusion of this paragraph implies that if the policyholder requests it, the insurer must apply to arbitration to determine differences in the insurance contract or disagreements on how to resolve a contentious issue that may arise between them. and the insured. In addition, the insurer will inform the insured of any other alternative that he has planned for out-of-court settlement of the dispute.
In accordance with the interpretation of these articles, it is believed that the insured person always has the right to freely choose a lawyer under the conditions established in the contract when it is necessary to resort to a judicial or administrative procedure to protect his interests. In addition, when a conflict of interest arises, the insured can make the indicated elections, because the conflict arises, that is, at the extrajudicial stage, as the insurer must intervene.
Another thing is to identify cases when such a conflict is recognized. Thus, it was recognized that there is a conflict when the legal entity providing insurance protection and the person who insures the other party to the dispute coincide. The conflict of interest is obvious as if both parties are insured for legal protection, as if one of them belonged to this industry, and the other is insured in another industry in which the company protects conflicting interests, such as civil liability, thus organizing It will be obliged to protect the defendant as an insurer of its civil liability, as well as to protect the interests of the injured party under the guarantee of legal protection / claims for damages.