Almost everyone will deal with an insurance carrier at some point in their lives. Most of us have some type of insurance policy we either pay for or enjoy the coverage of. When it comes to settling a claim, insurance carriers are typically the ones in charge. In most states, the law requires insurance carriers to operate in good faith and deal fairly with their insured, however, there are times when insurance carriers fail to act in your best interest. Filing a bad faith insurance claim is the remedy to such a situation.
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What is a Bad Faith Insurance Claim?
In an insurance policy, there is the policyholder and the insurer; in the event the policyholder needs to use the policy, the insurer is responsible for paying for the losses or damages. A bad faith insurance claim refers to an insurer’s attempt to deny you coverage or give you significantly less money than your case is worth. Bad faith insurance claims can apply to any type of insurance policy, including homeowners’ insurance, automobile insurance, health insurance, business insurance, and more.
If there is a difference in opinion between the policyholder and the insurance adjuster over the loss amount, this does not constitute bad faith unless the adjuster refused to provide a credible reason for their findings. Also, simply making a mistake does not constitute bad faith.
The Elements of Bad Faith Insurance Claims
Denying a Claim Without Reason
A written statement informing the filer of the reason why the claim was denied is required by law. Failure to provide a valid reason can be considered a bad faith practice.
Failing to Conduct a Prompt Investigation
An insurer has an obligation to reasonably investigate facts and circumstances involving the loss, but some insurance providers fail to do this correctly. The insurance company might fail to collect and review documents, interview witnesses and the victim, and collect evidence properly. This situation is also considered a practice in bad faith.
Offering Less Money Than What the Claim is Worth
The victim is entitled to financial compensation based on the situation, and if the insurance provider intentionally makes a low-ball offer, it is considered bad faith practice.
Delaying Decisions on Claims
If an insurance provider is taking a long time to make a decision on a claim, it could be because they are missing necessary information. First, try to contact them. If they are not responding or cooperating, check your state’s time limit within which providers must resolve a claim. Notify your provider first if this deadline has passed. If they still do not cooperate, this may be considered bad faith practice.
How Foley and Small Can Help
There are numerous instances where an insurance provider is acting in bad faith, causing you to suffer financially. In this situation, it’s important to consult an attorney with knowledge and expertise to find out more about your case. If you or someone you know has been involved in a dispute with an insurance carrier who has acted in bad faith and failed to properly handle and fully compensate on an insurance claim, contact Foley & Small. With our expertise and experience, we will help you every step of the way.