3 ways an insurance company can fail in its obligation to you

On Behalf of | Dec 8, 2022 | Insurance Law |

Insurance is a major industry that works with just about every adult and business in the country. Insurance coverage provides peace of mind and protection to individuals and businesses for everything from car crash liability to criminal elements that target businesses or residential properties.

Your insurance protects you from liability and can reimburse you for damage to your property. When you file a claim, you expect that the insurance company will be friendly and supportive. Unfortunately, many people find the process to instead be very adversarial and the workers that deal with them to be manipulative.

Sometimes, the drive for profit actually pushes an insurance company to engage in bad faith insurance practices that violate policies and the law. What are examples of bad faith insurance practices?

  1. Unreasonable delays

Whether you need to repair your home or pay someone else’s hospital bills, getting money quickly is typically crucial. Otherwise, interest and fees may start accruing, and you might even find yourself in a situation where the damage to your house worsens because you can’t make repairs quickly.

Insurance companies should process claims in a timely manner and communicate with policyholders. Delays that stretch from several weeks to multiple months are an example of bad faith insurance practices.

  1. Unfairly denied claims

The terms of the policy you purchased are likely very clear. All it will take is a review on your own or possibly with the help of a lawyer to determine exactly what policy should cover. When you know that the claim you made falls under the scope of your policy but the insurance company denies it anyway, that unfair denial could be the insurance company intentionally breaching its policy to you and thereby engaging in bad faith practices.

  1. Inappropriate settlement offers

A settlement often means a quick resolution to your claim. The insurance company pays a flat amount now for all of your current and future costs. The problem with settlements is that the people negotiating them often don’t understand the long-term implications of the situation.

The insurance company may try to take advantage of that ignorance by offering a very low settlement amount. Then, when more expenses arise, they turn their back on the policyholder because the settlement agreement absolves them of financial liability.

Policyholders in one of these unpleasant situations can sometimes bring bad faith insurance claims against their insurance providers. Learning more about complex insurance claims and the laws regulating the insurance industry can help you identify and fight back against bad faith insurance practices.