What to Do If Your Insurance Acts in Bad Faith
In the United States, approximately 476 cases have been filed as putative class actions, and 856 cases included allegations of bad faith, indicating a significant number of claims and legal battles related to insurance.
Dealing with insurance is already stressful, especially after an accident or loss. In some cases, an insurance company you trusted fails to uphold its end of the agreement.
When this happens, it might be more than just poor service. It could be bad faith. Bad faith insurance lawyer Kristin Hobbs says if found guilty of acting in bad faith, insurance companies may be required to pay additional compensation to policyholders on top of the original claim. These companies will also be subjected to punitive measures.
This article will explain how to spot the signs of bad faith insurance and what steps you can take to protect yourself and get the help you deserve.
Understanding Bad Faith Insurance Practices
You expect the company to act in good faith when you file an insurance claim, but this does not always happen. Being aware of bad faith insurance practices is important to protect your rights.
Bad faith describes a scenario where an insurer either doesn't fulfill its obligations, denies a valid claim, delays payment for no reason, or misrepresents the terms of the policy. These types of actions destroy trust and make you feel vulnerable at a time when you most need help.
Know your policy details and keep a written record of all communications with the insurer. If you find yourself suspecting bad faith, try to put together some evidence to support your case and consult a legal professional.
Knowledge of what constitutes bad faith insurance practices can help you take the necessary steps to obtain the appropriate coverage.
Signs Your Insurer May Be Acting in Bad Faith
What are the warning signs that an insurance company is acting in bad faith?
Delays without good reasons in the claims processing by the insurer are always suspicious. Your insurer may demonstrate bad faith by requiring exorbitant amounts of documentation or frequently "losing" paperwork.
Other signs of your insurance company acting in bad faith include the insurer denying your claim and failing to provide a clear explanation, the explanation appearing vague and evasive, or the insurer offering you a settlement far less than what you deserve.
Follow your instincts. If it does not feel right, it is not. If you ever suspect that your insurance company is acting in bad faith, be vigilant and seek insurance legal advice.
Documenting Your Claim and Communications
You have to safeguard yourself against bad faith acts by documenting everything about your claim and all communications with your insurer.
Keep copies of any documents related to your policy, correspondence, or evidence related to your claim.
Take very detailed notes during phone calls where you record dates, times, names, and key points discussed. If you send emails or letters, get certified mail or request read receipts confirming their delivery.
Establish a timeline of events that shows all the activities of your claim and delays. Thorough documentation can help create a clear record against which bad faith actions can be identified. You can use your documentation to help you contest any potential disputes.
Steps to Take When Facing Bad Faith
After you establish your documentation of the claim and communication, the next steps involve addressing any bad faith practices you observe.
Call your insurance adjuster. State your concerns clearly, and demand a resolution. Be respectful but firm when discussing your observations.
In case a satisfactory response is not received, escalate the matter to a supervisor or manager within the company, noting down all such interactions carefully.
You can also file a complaint with the state insurance department, which may investigate the claims itself.
Let your insurance company know you are aware of their obligations and that bad faith results in consequences. Organization and perseverance are key to obtaining proper insurance coverage.
Legal Options and Seeking Professional Help
Don’t hesitate to seek professional legal assistance and study your legal options to address the bad faith practices of an insurance company.
Consult a lawyer with expertise in insurance law. These legal professionals can review your case and advise you on what to do next.
Alternatively, you can file a complaint against the insurance company with your state insurance department for their misconduct, which will lead to a review and investigation. If all other options fail, litigation may be your last chance to seek compensation.
The documents and evidence you have gathered will help support your claims.
