Because not all insurance companies will follow the law and treat people with the respect they deserve, it’s vital that you protect your rights against those companies that may be breaking the terms of their policies, failing to uphold their promises, or otherwise acting in bad faith.
The insurance business is founded upon a very basic deal: the customer provides monthly payments or yearly premiums to the insurance company in exchange for significant financial assistance in case something goes wrong, such as an accident. However, some insurance companies fail to respect this tradeoff.
Generally, an insurance company has acted in bad faith if it fails to fulfill the obligations stated in the insurance policy language or if it doesn’t abide by the laws of the particular state where the claim is made. Common insurance bad faith practices include the following:
Keep in mind that an insurance company does have the right to deny your claim, but only if you’ve violated the terms of your contract, if the claim you’ve filed is fraudulent, or if your demand isn’t in accordance with the terms of your policy. You must be able to prove that your insurance company’s conduct was egregious and dishonest in order to establish a valid bad-faith lawsuit.
If you believe you’ve been the victim of an insurance carrier’s bad faith, you have several options to pursue a case for recovery. First and foremost, it’s important to secure the expert advice of an attorney who specializes in these types of cases. A lawyer will be able to help you recognize whether the insurance company violated the implied agreement and execute the proper legal strategies based on the specifics of your case.
Insurance companies are required to recognize your claim, investigate promptly, respond quickly to your communications, not slow down the progression with unnecessary forms, and offer definite reasons if your claim is denied or delayed. If you believe the company has failed to abide by any of these acts, you can choose to pursue two possible types of bad faith claims: first-party and third-party.
A first-party insurance bad faith claim occurs when an insurance company unreasonably refuses to pay or properly investigate a claim. A third-party insurance bad faith claim occurs when an insurance company unreasonably fails to defend, insure, or settle a claim within policy limits or investigate a claim for a different party.
It’s important to note that insurance companies will likely employ expert legal teams to protect themselves from bad faith insurance claims. Therefore, you’ll need a knowledgeable attorney on your side who can help you file and negotiate a bad-faith lawsuit.
The most common defense insurers use against bad faith insurance claims is that the insured also handled the claim negligently. For example, if you exaggerated damages or didn’t provide follow-up information in a timely manner, it could be argued that you also acted negligently and therefore the insurer’s rejection or delays in processing were not their fault.
It’s important, in this case, to follow protocol when filing a claim, communicate in writing when possible, record a date-stamped summary of all phone conversations, and keep thorough records of all correspondence.
Ultimately, going up against insurance companies is not a simple matter, and winning a bad faith insurance suit requires both thorough documentation and professional expertise. However, it’s usually worth it to avoid having to pay steep out-of-pocket fees.
If you’ve ever dealt with an insurance claim or settlement, you know that it can be a frustrating and toilsome process. Fighting with an insurer who’s acting in bad faith can make matters even worse. If you think your insurance company may be breaking the terms of their policy, contact the experts at The Umansky Law Firm. We’re a group of skilled bad faith insurance lawyers who will fight to help you obtain full and fair compensation.
With over 100 years of combined legal experience, our team has the expertise to launch an investigation into your case and the circumstances leading up to the alleged act of bad faith. We’ll work tirelessly to fight for your rights. Give us a call at (407) 228-3838 or complete our online contact form to receive a free consultation.
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