When you have a policy with an insurance company, you have essentially entered into a contract with them. They, along with yourself, have to abide by the terms set in that contract. If you feel that the contract has not been kept, you have a case of bad faith insurance. But do you know what that fully means?
What does insurance bad faith mean?
In a brief nutshell, insurance bad faith is when the insurance is looking for ways to prevent paying the policyholder on a claim. The definitions of what constitutes bad faith will vary from state to state. The opinion of the policyholder that the insurance company didn’t pay out what they thought the claim was worth isn’t bad faith. Bad faith is more when there is evidence that the insurance company ignores evidence that supports the policyholder’s claim and refused to pay out.
What are some common examples of bad faith?
While this is not, by all means, the entirety of what can be considered bad faith, here are some examples of what can happen to cause a bad faith insurance suit.
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– Failure to disclose all policy limits
– Unreasonable denial of coverage
– Failure to respond on time on a time-limit demand
– Failure to give important information to the claimant
– Not entering into any negotiations for solving the claim
– Does not do a reasonable investigation into the claim
– Does not give a reasonable explanation for denying the claim
– Refusing to pay out the claim without any investigation
– Offering substantially less money to settle than what the claim is actually worth
– Not paying or denying the claim in a reasonable amount of time
– Not attempting to come to a fair and reasonable settlement when liability in the case is clear
– Not confirming or denying coverage for a reasonable period of time
– Discounts on the claim coverage without any explanation
– Using unethical or unlawful techniques for their investigation
– Too much focus on trying to recover on uninsured portions of the loss
– Gives advice to not retain a lawyer or threatens non-payment
– The policy is canceled due to filing a claim when the policyholder is not a fault
Keep in mind that each case is different and may have different outcomes. Just because one case has one outcome does not mean your case will have the same outcome.
How do I avoid having my claim denied?
An insurance company can deny a claim if the policyholder doesn’t uphold their end of what is required by the policy. It can be denied if a claim is made on something that is not covered by the policy or if a fraudulent claim is made on something that didn’t happen. If you want to avoid having your claim denied make sure you inform your agent if there is a recoverable loss. Make sure you know your policy inside and out to give the appropriate language for your claim. Make sure you keep a record of all phone calls and all records that deal with your claim. You should have their name, the date, and the time of the conversation. Write down what the conversation was about and how it ended. If they mention a verbal settlement or want you to provide additional information, make sure that is in your notes as well. Keep track of all questions and answers and make copies of all written correspondence you receive. All of this information will be needed by your lawyer if you hire one.
If you feel you have a claim you need to be able to prove two things. One, you need to prove that the benefits that you are owed under your policy were withheld. You need evidence to show that you had a valid claim that was denied by the insurance. Second, you need to prove that the denial of your claim was unreasonable. For bad faith insurance claims, we recommend you retain a lawyer like Michael R. Braun. He can advise you on what information and evidence you need to support your case and will further help you gather information by formally requesting your claims file which will have the adjuster’s notes.
His team will be by your side, advising you each step of the way.