Individuals maintain an insurance policy for years or even decades without once having to file a claim. After a hailstorm demolishes a roof or a serious motor vehicle collision results in catastrophic injuries, the policyholder assumes the insurance carrier will handle the claim in a prompt, courteous and professional manner. Unfortunately, this isn’t always the case.
Policyholders expect their chosen insurance carrier to act in good faith. That is, they will uphold their obligations and not cut corners when it comes to processing a claim. Unfortunately, it is not uncommon for some carriers to act in bad faith. This occurs when the company denies, devalues or delays the claim without providing any solid rationale for the decision.
Some examples of bad faith insurance can include:
- Failing to complete an objective investigation: The insurance carrier must complete a thorough, objective investigation to reach their conclusion. They cannot simply do a cursory investigation of the claim and reach their suggested settlement.
- Failing to process the claim within a reasonable time: If the insurance company delays the process in any way or simply fails to begin the process in a timely manner, they could be said to act in bad faith.
- Refusing to pay a legitimate claim: At the end of the process, it is not uncommon for the insurance carrier to simply deny a claim. When a legitimate claim is denied based on spurious or incomplete reasoning, it is often indicative of insurance bad faith.
- Relying on ambiguous or intentionally confusing contract language: Insurance policies are often dense documents filled with numerous legal definitions and seemingly contradictory statements. When the insurance carrier relies on intentional gray areas to deny a claim, many would argue that the company has acted in bad faith.
When all is said and done, policyholders must remember that an insurance company is truly a company. While they will not generally act negatively toward their clients, the company must always hedge their decisions against remaining profitable and protecting their bottom line. Unfortunately, a policyholder must often fight to protect their own best interests and recover what the company owes them based on their policy and the damage or injuries they have suffered.
