If you have a claim to make against your insurance and the company seems to be dragging its feet or pushing off your request, you might be dealing with a bad faith insurance scenario. Bad faith insurance is a term that refers to the insurer’s attempt to refuse to pay a legitimate claim. To do this, the insurer may avoid investigating the claim or slow down process to a point that it’s no longer reasonable.
Insurance agencies are acting in bad faith when they don’t represent their own contracts and policies correctly. For example, if your policy states that you can get compensated for up to $15,000 in damage to your home after it is damaged with no restrictions and the insurance company tries to say that you can’t make a claim because the damage was “an act of God,” then you may be able to argue that they’re acting in bad faith.
How do you know when your insurance company is acting in bad faith?
It isn’t always easy to know that an insurance company is acting in bad faith. Sometimes, they may be slow to review a claim for legitimate reasons, like having staff out or handling a large number of claims unexpectedly. However, every policyholder is entitled to being treated fairly and in accordance with the policy they hold.
It’s worthwhile to question the insurance company if it is taking an unreasonable amount of time to process your claim or if it denies the claim despite you making sure that the scenario would be covered by your policy in the past.
Every state has laws to protect consumers against insurance companies that may act in bad faith, so there are some legal protections available to you. While an insurance company’s simple mistakes won’t constitute bad faith, insurance companies that are unreasonably attempting to deny your claims can be held liable.
If you believe that the insurer is acting in bad faith, you may want to look into your legal options before speaking with another insurance agent. Keep all of your documentation, and write down the names of those you’ve spoken to (with the times as well). Doing this will help you build a case against the company if it is acting in bad faith.