When you purchase an insurance policy for your home, auto or commercial property, you are taking steps to protect yourself against the possibility of an accident or damages. Having insurance can bring peace of mind when unforeseen circumstances occur. It may also mean the difference between indefinite financial struggle and recovering so you can move forward.
Therefore, it can be devastating if an insurer denies your claim or drags the claims process out. A claim following an accident with injuries might leave you unable to pay medical bills or receive the care you need. A denied business insurance claim can mean loss of income, and a rejection of a homeowners claim might mean you cannot make critical repairs on your house. How can you know if an insurer has valid reasons for denying your claim or is acting in bad faith?
Examples of bad faith
Bad faith describes the actions of an insurer that have no intention of living up to the terms of your policy. An insurer may deny a policy claim for numerous reasons, such as missed premium payments, claims that a policy does not cover or mistakes on your application. However, denial of a valid claim is one way an insurer acts in bad faith. Other bad faith actions include:
- Failing to adequately investigate your claim
- Waiting until after the period of contestability to allege you made mistakes on your application
- Ignoring the clear evidence of liability in a claim
- Refusing to defend you in court when your liability policy covers the claim
- Allowing an unnecessary amount of time to pass before making a decision on your claim
- Giving no reasonable explanation for denying your claim
Insurance companies are businesses that must focus on the bottom line. This not only means earning money but also avoiding paying out money unnecessarily. However, it violates your rights when money-saving tactics include bad faith practices.
What to do if you suspect bad faith
In any situation when dealing with legal matters, it is wise to document everything. Collecting and organizing emails, dated notes from phone calls, receipts and pictures of the accident may prove valuable in your fight for fair coverage. An insurance company acting in bad faith might also use your own words against you. Therefore, it is wise to speak cautiously and truthfully. Many in West Virginia also find it beneficial to seek legal advice as soon as they suspect an insurer is not handling their claim fairly.