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Bad Faith Insurance Practices: What You Need to Know

Posted in Blog on December 17, 2019

Bad faith insurance is a term that is used to describe an insurance company’s unfair behavior. Bad faith behavior manifests in many different areas but is broadly referenced when a claim denial happens. It is also referenced when an insurance company provides insufficient payment on a claim that should be considered payable by the company. Bad faith insurance practices occur when insurance companies executives feel they can save money when they deny payable claims, acting out of self-interest. Executives know that when a claim is rejected multiple times, the insured usually backs off trying to gain coverage, out of fear of standing up to the company.

The term ‘bad faith’ is applied to relevant insurance practices because the company is acting unfairly, which must be determined by either a judge or jury. A judge or jury can find an insurance company guilty of bad faith by reviewing the details of the company’s behavior and deciding whether or not there is reasonable doubt that the company knew it was acting unfairly.

Insurance companies are obligated to provide their policyholders with comprehensive care during the claims adjusting process, which includes many practices such as:

  • Investigating the claim in a timely manner.
  • Settling claims swiftly as soon as it has been determined that coverage is owed.
  • Clearly and promptly corresponding with the policyholder and insured parties.
  • Thoroughly describing the details of the policy terms.
  • Confirming or denying claim coverage within a timely frame after the claim is submitted

In addition to rejecting claims and not providing proper payment coverage, circumstances involving inadequate case investigation, failure to give consideration based on the interest of the insured person, refusal to defend a lawsuit, or refusal to settle on behalf of the insured party all constitute bad faith insurance practices.

If you suspect your insurance company is acting in bad faith, it is within your rights to hire a lawyer to fight on your behalf. If you can successfully prove bad faith practices against the company, you can collect damages. Damages in bad faith disputes result in the amount of money that was originally due to you according to your policy. In some cases, additional awards are given if the insurance company’s bad faith caused you provable damage that totals out to be more than the policy amount. In extreme cases, the court awards the plaintiff punitive damages if the plaintiff proves particularly malicious behavior on the part of the insurance company.

If you are thinking of filing a bad faith claim against your insurance company, you must be sure to do it within a specific timeframe, which depends upon the laws of the state in which you live. Getting in touch with a bad faith insurance law firm will help determine the viability of your case. Working with an experienced bad faith insurance lawyer can provide you with the legal knowledge and support you need to help you stand up to a major insurance company.

The lawyers of Zaner Harden Law are committed to its clients, and hold insurance companies that practice bad faith insurance accountable for their actions against their insureds. If you have been affected by what you believe to be bad faith insurance practices, get in touch with the lawyers of Zaner Harden Law to help you fight your case.