When you make an insurance claim, you expect the insurance company to treat you fairly and honestly. You have paid for the premium to help protect your interests when needed. Some insurance companies operate in bad faith and are not fair.
At times, companies will delay, undervalue, or outright deny valid claims. Being able to identify these warning signs can protect your rights and your ability to seek a fair settlement amount for your damages.
1. Unreasonable Delays in Processing Your Claim
It may take longer to resolve claims that require tougher investigations or involve several parties. Delays that are excessive and unexplained may indicate bad faith on the part of the party. A good faith insurance company communicates promptly; they provide updates and do not unnecessarily delay.
In contrast, a bad faith insurer will continuously request unnecessary paperwork or offer vague excuses to delay your claim. These methods are meant to get under your skin so you take a smaller payout or abandon your claim.
2. Denying Claims Without a Valid Explanation
If your insurer rejects your claim without a valid reason, that is a major red flag for a lawsuit. Insurance companies must give you a specific, factual reason for the denial. It is not acceptable to simply say it is not covered under your policy with no details or reference to the policy wording.
When your insurance claim is denied, always ask for a denial letter. You can argue your denial was based on the insurer’s bad faith if their reasoning is weak or contrary to your policy.
3. Offering Unreasonably Low Settlement Offers
Insurance companies may sometimes offer settlements that are way less than your losses. Such ‘lowball’ offers ignore the costs of medical bills, repair work, and lost wages. The aim is to convince you to settle for less than you deserve and save money.
You might spot this trick when the insurance agency makes you a quick, lowball offer without doing its due diligence first. Consider consulting with an attorney to determine if the amount falls within the state’s insurance limits and your policy terms.
4. Failing to Communicate or Ignoring You
Good communication is a basic duty of every insurer. If your calls are not answered, your emails are ignored, or you are given vague responses that do not answer your questions, your insurer is probably avoiding responsibility.
A continual lack of communication could mean that your insurer is trying to delay payment on your claim or hide the way they have mishandled it. Make a note of every detail, including the name, date, and subject of the conversation you had with the candidate. Such documentation could be key evidence for a court case.
5. Misrepresenting Policy Language or Facts
Policies are often rich with complicated legal jargon, making them unwieldy for an average policyholder to comprehend. Some insurers take advantage of this and lie about what your coverage covers. They may claim damage isn’t covered when in fact it is or misinterpret the wording of the policy for their advantage.
This practice is deceptive and constitutes bad faith. If you suspect that misrepresentation might be happening, review your policy closely and have an attorney confirm the interpretation of your insurer when required. The core of good faith dealings lies in transparency and accuracy.
6. Failing to Conduct a Proper Investigation
A thorough investigation is an important aspect of claim evaluation. A bad faith insurer may overlook critical measures, dismiss essential evidence, or use tainted assessments that show the company in a better light.
As an example, they could overlook witness statements or dismiss repair estimates in support of yours. It is against the law for an insurance company not to investigate your claim. Their negligence can cause wrongful denial or underpayment of your claim.
Conclusion
Insurance firms are legally bound to treat policyholders fairly. Stay alert for the signs if you are receiving excuses for delays, vague denials, low offers, or no communication. Heed expert guidance and never back down. Enlist the help of an experienced insurance attorney to push back against bad faith tactics to secure your compensation.
Key Takeaway
- Delays and vague denials are common warning signs that your insurer may be acting in bad faith.
- Low settlement offers that do not match your documented losses often indicate an attempt to undervalue your claim.
- Clear, written communication and detailed recordkeeping can protect you if you need to challenge unfair insurance practices.
- Consulting an experienced insurance attorney can help you hold the insurer accountable and secure the compensation you deserve.
(DISCLAIMER: The information in this article does not necessarily reflect the views of The Global Hues. We make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information in this article.)
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