When you need to file an insurance claim, you will not be dealing with the friendly agent who sold you the policy. You will be dealing with an adjuster. It’s their job to pay as little on your claim as possible. This is a summary of bad faith insurance practices that you may have to deal with when making a claim.
Unfortunately, going through the process of filing an insurance claim will likely be challenging. Remember that the insurance company wants to protect their best interests, not yours. They will try to use your inexperience to their advantage. Insurance companies are not all out to get their customers, but it is important to know the details of your policy and your benefits. If you are not getting the results you expect, you may have a potential bad faith insurance claim.
Bad faith on the part of the insurance company can be any practice that goes against the policy benefits when dealing with legitimate claims. Bad faith practices include denials, underpayment, or unnecessary delay in payment.
Examples of Bad Faith Practices Include:
- Avoiding payment on a claim by misrepresentation of contract details.
- The agent does not fully disclose the limitations and exclusions of the policy before you by the policy.
- Being unreasonable in what they request to prove a covered loss.
- Focusing on reasons to deny the claim rather than reviewing the supporting evidence.
- Lying about applicable citations or laws as a reason to deny your claim.
- Unwillingness to pay a fair amount to compensate you for a loss that is covered.
- Delaying a proper investigation of the claim with no legitimate reason.
Unfortunately, insurance companies have become more likely to use these tactics. They often rely on the fact that their customers often don’t understand their policies, rights or legal options.
How Bad Faith Insurance Laws Help to Protect Consumers
Fortunately, there are laws to protect policyholders and to regulate insurance companies. These laws are designed to prevent bad faith practices. If insurance companies mistreat their customers, these bad faith laws make it possible to take legal action.
If you feel that your insurance company is engaging in bad faith practices, you have the right to file a complaint with your state’s insurance board. Your complaint will begin an investigation process to evaluate whether they were acting in bad faith or not. The state insurance board does not have the power to require the insurance company to pay the claim in full; they can just fine the company. Therefore, to be compensated fairly, you will need to pursue a legal claim.
This is one of the reasons why you should thoroughly research your options before purchasing life insurance (or any type of insurance). You may want to get in touch with an insurance agent who probably uses CRM software (of a company like iLife Technologies) that can help them in finding the best deal and best trustworthy company for you. That way, you won’t have to deal with issues while filing claims.
When Is It Not Bad Faith?
Dealing with insurance companies can be very time-consuming and frustrating, not all negative experiences involve bad faith practices. As a policy holder, it is recommended that you read your policy and ask questions of the agent who sells you the policy rather than not reading it until you decide to file a claim. Understanding your rights and what your policy states will protect you and prevent the insurance company from taking advantage of you.
In the process of filing a claim, it is common to have issues working with an adjuster or have a disagreement about the fair value of the loss. Mistakes happen and can often be resolved. These are not typically bad faith related issues. However, if the adjuster is unreasonable about the proof they require, or they don’t provide you with documentation, then bad faith practices may be an issue.
Contact us With Questions about Bad Faith Insurance Practices
If you think your insurance company is acting in bad faith while handling your claim, we can help. Contact Mynor E. Rodriguez today to discuss your insurance claim.