Bad Faith Insurance: When Insurance Companies Act Unfairly or Deceptively

Everyone would like to think that insurance companies sincerely care about claimants and that they are truly concerned for their best interests. However, many insurance companies often act unfairly or use unscrupulous tactics classified as bad faith insurance practices, which makes the injury claim’s process both frustrating and time-consuming.

Insurance Companies Must Act in Good Faith

Fortunately, Colorado law has set forth guidelines that insurance companies must follow. The law requires that insurance companies treat their claimants fairly and act in good faith. What does good faith entail?

It means that insurance companies must:

 

• investigate claims promptly;
• communicate regularly with the claimant regarding the claim’s status;
• pay claims in timely manner;

 

• promptly pay any undisputed portions of the claim; and
• provide a reasonable and prompt explanation of a claim denial.

Insurance Companies’ Shady Tactics and Unfair Actions

Many insurance companies attempt to sidestep Colorado’s insurance laws. Their bottom line is very important to them, and some do to whatever is necessary to reduce their payouts.

In addition to breaking the good faith rules, some insurance companies engage in outright shady actions to reduce claim value or avoid payment. Some of the strategies they may try to use include:

• settling very quickly (when they suspect the victim’s injury has not fully manifested, in order to avoid paying for future medical bills);
• offering a much lower settlement than the damages are worth (trying to capitalize on the victim’s financial desperation);
• trying to get the claimant to admit fault;
• looking for past medical records (so they can say your past injuries affected your current injuries); and
• asking loaded questions during interviews.

What to Do if the Insurance Company Acts in Bad Faith

First and foremost, you’ll need to contact an attorney. Your attorney will advise you on how best to handle the situation and will look for evidence of bad faith insurance practices.

You have the legal right to hold your insurance company responsible for any unfair settlement practices. If you suspect the company is lowballing you or if it threatens cancellation of your policy, you might be able to collect additional damages, including:

 

• twice the amount in question;

 

• attorney fees; and
• possible punitive damages.

Contact an attorney in your area that handles insurance disputes and bad faith settlements. Even if the insurance company has yet to cross the line and break any Colorado laws, having an attorney helping with the claims process helps many clients collect fair compensation.

It’s Beneficial to Hire an Attorney Early in the Process

If injuries are serious or damages are significant, it’s prudent to have an attorney representing the case from the onset. Not only can an attorney provide legal guidance and help present evidence, but an attorney also might be able to recognize unfair insurance tactics to which claimants may not be privy.

For help with your case, contact Aurora injury lawyer D.J. Banovitz for a free consultation at (303) 300-5060.