If you have insurance coverage, but the insurer is refusing to pay according to the policy, you may have an additional civil claim for the insurance company’s bad faith. You may find the advice of an Insurance Bad Faith Claim Attorney useful. View qualified Insurance Law Firms in your area to find Insurance Lawyers.
When you purchase a policy of insurance (Insurance Law), the insurer guarantees it will pay for (cover) your losses in certain circumstances, as set out in the policy. If the insurer refuses to pay according to the policy, its action is akin to fraud. In addition to having the claim paid, a bad faith denial of insurance claim in traditional court will also compensate you for any damage as a result of the bad faith, and may even result in punitive damages.
Your insurer has a legal duty to deal with you in good faith, including to:
- Provide a written explanation that references the policy
- Deny or pay the claim reasonably quickly
- Look for reasons to pay the claim, rather than focusing on denial
- Investigate the claim
Your insurer also has a duty of fair dealing, which means it cannot:
- Unduly delay investigating and deciding to pay or deny your claim
- Refuse to defend you if you are sued
- Refuse to settle
- Unreasonably read the policy to exclude coverage
- Fail to quickly and thoroughly investigate the claim to determine if you are covered
- Fail to promptly respond to communications regarding a claim
- Misrepresent policy provisions, coverage or other important facts
- Deny a covered claim
- Underpay on the policy
How to Make a Claim
Whenever you have a claim, you should take the following steps to help protect yourself:
- Notify your insurer or local agent of your claim
- Read your insurance policy carefully so you understand your coverage
- Keep records of everything, including taking notes of all telephone conversations between you and your insurer
- Make your claim promptly
How to Make a Bad Faith Complaint
If you feel you have been unfairly denied or underpaid by your insurer, you may take the following steps:
- Make a formal complaint with your state’s Department of Insurance or Commissioner of Insurance
- Meet with an Insurance Law Attorney
When you meet with the attorney, s/he may direct you to:
- Bring your documentation, including the policy, claim information and all notes and records of communications
- File a petition or complaint in civil court
Once initiated, you will have to demonstrate the insurer’s bad faith. This may require you prove one of the following about the insurer’s conduct:
- There was no justification in the policy for the denial or underpayment of the claim.
- The insurer was reckless in its processing of your claim.
- The insurer unreasonably delayed processing your claim.
- The insurer disregarded your rights under the policy and the law.
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