Depending on the situation, dealing with an insurance company when you need to make a claim can be relatively seamless or—to put it bluntly—a complete nightmare.
While in many cases insurance companies do a good job and provide claimants with the compensation to which they’re entitled under their policies, in other circumstance, they may act in “bad faith.”
When the latter is the case, you may need to consult an insurance disputes lawyer to achieve the outcome you need and deserve.
What it means to act in bad faith
Per state and federal law, all insurance companies must properly review, negotiate and settle claims using “good faith” practices. This is part of standard insurance contracts—all parties involved must be honest and fair in their dealings with one another. When an insurance company acts in bad faith when it comes to your claim, you may need to take legal action.
The following are some common examples of how insurance companies may act in bad faith:
Failing to properly investigate: To operate in good faith, insurance companies must investigate all claims as quickly and cohesively as possible. They must avoid unnecessary delays and use commonly accepted best practices as they complete investigations.
Claim denial without just cause: If an insurance company denies a claim, it must provide a clear reason for why it has done so. Valid claims that get denied for reasons that are unfair may constitute acting in bad faith.
Making unfairly low offers: It’s common for insurers to begin the negotiation process with a low-ball offer, expecting that you and your lawyer will counter with a higher offer and the two of you can settle for amount somewhere in the middle. However, if the company refuses to increase its initial offer, it may be operating in bad faith.
Delaying payout of claims: Even if they agree to provide fair compensation to claimants, some insurance companies may delay paying out the money they owe. If they do not provide payment within a reasonable amount of time, it could leave you unable to cover medical bills, property damage and other expenses.
Falsely representing policy information: The contracts associated with insurance policies can be complicated and include language the average person does not really understand. Some insurance companies may try to take advantage of this and mislead claimants about what their policies cover. Therefore, it’s important to have an attorney representing your interests during the insurance claims process.
Seeking monetary damages for bad faith dealings
You may be able to pursue compensation from an insurance company that has acted in bad faith, especially if you’ve suffered clear damages stemming from these actions. If successful, you could receive compensation for emotional distress the actions caused, along with punitive damages meant to punish the insurer. That would be in addition to the money you should have been provided in your initial insurance claim.
If you believe an insurance company has acted in bad faith during the claims process, work with legal counsel to determine your best course of action. Speak with an Orlando insurance disputes attorney at Johnson & Williams, P.A. to learn more.