Denying Payments Without Reasonable Basis01
After an agreed-upon contract is signed, insurance companies cannot legally deny claims that are outlined as part of your coverage within a policy. While situations are dependent on your coverage and the specific wording of documentation as it pertains to your situation, a denial may qualify as an insurance provider acting in bad faith.
Discounting Payments Without Reasonable Basis02
When a situation arises that requires payout from an insurance provider, a claim must be submitted. Insurance companies often offer less money than a claim is worth to increase their profit margin. When this doesn’t cover all your damages, despite paying enough for reasonable coverage within your policy, legal action may be necessary.
Delaying Payments Without Reasonable Basis03
During payouts, policyholders have a right to receive payment in a timely manner. In order to deter policyholders from pursuing compensation, insurance companies will delay both the payment and the process for achieving it. This can impose great financial hardships upon those who need promised benefits immediately.
Failing to Affirm/Deny Coverage Within Reasonable Time04
Insurance companies may take an unreasonable amount of time to investigate a claim, far before agreeing to or denying payout. Much like payment delays, this tactic is done in hopes of persuading policyholders to give up pursuit of compensation. This, in turn, increases insurance company profit margins at the policyholder's expense.
Failing to Conduct Investigations05
Insurance companies must operate under the concept of good faith on behalf of their policyholders, acting in their best interest under all circumstances. This includes investigating claims that require compensation or payout quickly and thoroughly, to refrain from putting financial or emotional stress on a policyholder. Avoiding investigation often means avoiding payment, which is illegal and immoral.
Misrepresenting Law or Policy Language06
Insurance coverage comes with a lot of paperwork, often littered with jargon that is difficult to understand. Misrepresenting law or policy language includes failure to disclose the existence of coverage that may be under your plan in order to avoid paying you. Failing to disclose claim filing deadlines and not providing the paperwork necessary are also included.
What does good faith mean in insurance?
Good faith is an implied duty of acting in a policyholder’s best interest and engaging in fair dealing. More specifically, the action of conducting prompt and thorough investigations and payments in response to a policyholder’s claim is expected.
How do I file a bad faith claim against an insurance company?
First and foremost, review any insurance contracts held with the insurance company to reaffirm that misconduct has occurred. Keep logs of any claims made as well as any insurance provider responses, including delays or denials. Bring all documents to an attorney, and we’ll help initiate a lawsuit.
What types of damages are available in bad faith insurance lawsuits?
Payouts for bad faith insurance lawsuits may include the amount expected from the original claim and attorney fees. Additional compensation for financial harm that resulted from the bad faith delay or denial is also applicable, including lost wages or compensatory damages.
Can I sue an insurance company for not paying?
As long as your plan states applicable coverage and the claim does not violate the terms and conditions of said contractual agreement, yes. There is no reason why your policy provider should not pay you, and pay you a reasonable amount given the damage severity.