Bad faith insurance claims can have devastating consequences. Policyholders may have financial losses, emotional distress, and a sense of helplessness.
However, there is hope. You can take a stand, fight against these bad claims, and get the compensation and justice you deserve.
Experienced lawyers can assess the merits of your claim and work tirelessly to protect your interests. Hiring one can level the playing field and increase your chances of winning a settlement or court battle.
Take action today if you’re ready to fight back. Examine the details in this article and request legal help by asking us for a referral to a local attorney.
What are Bad Faith Insurance Claims?
Bad faith insurance claims refer to unfair or dishonest treatment by an insurance company. Some of the most common examples of this behavior include the following:
- Denying or undervaluing a legitimate claim without proper justification
- Failing to promptly investigate or settle a claim within a reasonable time frame
- Deceptive practices, such as misrepresenting policy terms or coercing policyholders into accepting unfair settlements
Most jurisdictions recognize an implied covenant of good faith and fair dealing. As a result, insurance companies have a legal obligation to act honestly and in the best interests of their policyholders. The remedies can include compensatory damages, punitive damages, and attorney’s fees.
Consequences of Bad Faith Insurance Claims
First and foremost, policyholders may experience financial losses when they become victims of bad faith claims. You have to carry the financial burden after a wrongful denial or under evaluation. This situation can lead to economic hardship due to hefty medical bills, devastating property damage, or loss of income.
Furthermore, bad faith insurance practices can cause emotional distress and frustration. Delayed claim processing or inadequate settlements only add to your anxiety. The sense of betrayal and helplessness can be emotionally draining and erode trust in the insurance industry.
Steps to Take if You Suspect a Bad Faith Insurance Claim
Now for the important question, how do you fight a bad faith insurance claim? First, gather evidence, such as photographs, documents, or communication records. Additionally, keep detailed records of all interactions with the insurer. This documentation will serve as valuable evidence and help establish a pattern of bad faith. This is also important if you are facing a claim denial.
It is also essential to thoroughly understand your insurance policy. You must define your coverage, limits, and any conditions or exclusions that may apply. Familiarizing yourself with them will help you better assess whether the insurer’s actions align with their obligations.
Consulting with a lawyer who specializes in insurance law is highly recommended. They have the experience you need to assess the merits, review your policy, and determine the grounds for legal action. They can advise you on how they will represent your interests in negotiations or court.
Filing a complaint with your Department of Insurance can also be important. Visit the department’s website to identify the appropriate forms and guidelines for filing a complaint. They will review your complaint and may initiate an investigation into the insurer’s conduct.
Legal Recourse and Remedies for Bad Faith Insurance Claims
Pursuing legal action may be necessary after you exhaust other avenues. This process starts with drafting and filing a complaint. It details your claims and makes allegations about your insurer. In turn, the insurance company will get to respond before moving into the discovery phase. At this point, both sides must exchange information and work through pre-trial motions. Most states also make participating in mediation sessions mandatory before going to trial.
You may have an entitlement to various forms of compensation. For instance, compensatory damages make the policyholder cover the direct financial losses you suffered. They include medical expenses, property repair costs, or lost wages, among other elements. Additionally, policyholders may receive damages for non-economic losses, such as emotional distress.
Punitive damages punish the insurance company for its egregious behavior. These go beyond compensating you and declare that the court will not tolerate bad faith actions.
Preventing Bad Faith Insurance Claims
Selecting the right insurance company and policy is crucial. Look for insurers with a track record of prompt and fair claims handling. Additionally, carefully review the terms and conditions of the insurance policy before making a purchase. Pay attention to any exclusions or limitations that may apply and seek clarification from the insurer if necessary. To better do this, it’s important to be aware of some common errors within healthcare systems.
Transparency and open communication between policyholders and insurers play a vital role. Insurers should provide transparent details about policy terms, coverage, and claims processes. They should also make an effort to communicate openly and promptly.
Talk to a Local Insurance Attorney
Combating bad faith insurance claims requires knowledge, perseverance, and legal expertise. Therefore, consulting with an insurance lawyer can provide the guidance and representation you need.
We are here to help. Contact us today to request a referral to an experienced local insurance lawyer. Our team will connect you with a qualified attorney right away.
Contact us at (866) 345-6784 or complete our quick online form today!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations. Contact Aaron at [email protected] for article suggestions, collaborations, or inquiries.
