Bad Faith Insurance Practice: You Can Tell By These 3 Signs

Bad faith insurance practice is when an insurance company doesn’t meet its contractual obligations or otherwise acts in a manner in which practices are not in the best interest of the policyholder. When premiums are paid on a policy, it’s expected that the insurer will treat any claims in a fair and reasonable way. When this isn’t the case, a bad faith lawyer in Aurora may help claimants pursue a bad faith claim.

Bad Faith Insurance: Unnecessary Delays

Believe it or not, some claimants will become so frustrated by how long it’s taking that they will give up and accept a lowball settlement or no settlement at all.

It can sometimes be difficult to know if a delay is legitimate or not. The claims process can sometimes be lengthy, especially if an investigation is required. However, it is still expected to be done in a timely manner. So claimants have the right to periodically check in and see how the process is fairing.

The tactics that can be used to delay a claim are to:

 

• lose paperwork;

 

• require unwarranted additional information; and
• improper interpretation of the terms of the policy.

When there are signs that a claim is being improperly delayed, it may require seeking legal advice.

Bad Faith Insurance: Unfair Denial of Coverage

Sometimes the hope is that the policyholder doesn’t understand the terms and conditions of the policy. Or the insurance company could misinterpret the terms, even citing exclusions that don’t really exist.

The insurance company may try to say that not enough coverage is available when that is clearly not the case. If the claimant doesn’t know the policy limits, he or she could take the insurance company’s word for it.

Bad Faith Insurance: Shifting Blame on the Claimant

Some insurance companies may attempt to blame the claimant for the injury. Even if the case is clear-cut that the claimant was not responsible for the accident, some insurance companies may still try to get out of paying on the claim.

Misrepresenting the facts of the case or citing unfounded insurance adjuster interpretations of the accident are examples of how companies may go about doing this. This is why it is important to collect proper documentation and any evidence possible.

Steps to Take When Insurance Company Is Acting in Bad Faith

Policyholders aren’t left without options when it comes to an insurance company acting in bad faith. One step that should be taken is filing a complaint with the Division of Insurance in the Department of Regulatory Agencies in Colorado.

The complaint will be investigated and if it’s determined the insurer is acting in bad faith, it will be contacted by the Division of Insurance.

Another step that may be taken is seeking legal counsel. In some cases, a claimant could file a bad faith claim against the insurance company. Not only could this result in the original claim being paid, but additional compensation as well.

In some cases, punitive damages may be ordered in a bad faith claim. These are designed to punish the company for its actions and compel other insurers to act in good faith with policyholders. A bad faith lawyer in Aurora can go over the legal recourse that a claimant may have for a case of bad faith insurance practices. Call 303-300-5060.