Do you feel cheated by your insurance company?
Insurance Bad Faith
“Bad faith” is the legal term lawyers use to describe the intentional, malicious, or wrongful refusal of an insurance company to perform some duty or contractual obligation. In a nutshell, “bad faith” is when an insurance company does not treat the policyholder fairly and as a result the policyholder is denied benefits that are legally and contractually owed pursuant to the insurance policy.
When you buy insurance, you are simply buying a promise from the insurance company to pay claims covered under the specific policy of insurance for which you pay premiums. The types of claims and benefits covered are often complex and confusing, and it is all too easy for an insurance company to take advantage of its policyholders who trust the insurance company to help them trough a very difficult time in their lives. When this trust is betrayed, an insurance company has committed “bad faith”.
When they are trying to get you to buy insurance, insurance companies spend millions of dollars making you think that you are in “good hands” or that they are your “good neighbor”, but when it comes time to pay for your claim, all too often people realize the truth about insurance. The truth is insurance companies do not make billions of dollars every year by paying claims. Insurance companies are highly skilled in how to avoid paying valid claims.
Most of the time, the insured does not know he/she is being treated unfairly. The insured is at a disadvantage when dealing with a trained and knowledgeable insurance adjuster whom he/she assumes is looking out for him/her.
To help avoid becoming a victim of your insurance company’s bad faith conduct, you need to know the rules an insurance company must follow to avoid “bad faith.”
- Insurance company must treat its policy holder’s interests with equal regard as it does its own interests and can’t simply look for reasons to deny a claim.
- Insurance company must at all times be fair and honest with policy holders.
- Insurance company must assist the policy holder, disclose policy coverage and benefits, and communicate with and keep policy holder informed as to the status of the claim. The claims process is not adversarial.
- Insurance company must conduct a full, fair and prompt investigation of the claim and must be objective when handling the claim.
- Insurance company may not deny a claim based upon insufficient information, speculation or biased information and may not pre-judge a claim or make assumptions about what caused the loss.
- Insurance company must pay a claim unless there is a good reason not to. If the claim is denied, insurance company must give a written explanation for the denial and point to all facts and policy provisions that support the denial.
- Insurance company cannot make “low-ball” offers.