Q: If my house burns down, what kind of behavior might constitute insurance bad faith from my fire insurance or homeowner’s insurance?
Often insurance companies, after a loss like a house fire, will immediately offer a small sum of money, for example, $5,000 so you can go buy yourself some new clothes and get on with your life. Then after that initial payment, the insurance company disappears, you can’t get a hold of your claims adjuster, they never return your calls, and so on. The insurance company is not helping you with your claim even though, in the case of a house fire, you may have lost everything.
The insurance company might ask what kind of personal property was in the house so they can pay you, but you never planned for this loss and are unsure of how to account for all the personal property lost. It is difficult to inventory everything you owned during a traumatic time while also trying to maintain a job and find other living accommodations and just getting life back in order.
Insurance companies have the obligation to assist, instruct, and coach their insureds through this process, but too often the insurance company does not provide any help or assistance and the entire process ends up taking a long time.
It can be a major struggle when there isn’t any assistance offered by the insurance company, and then when the insured does ask the insurance company for assistance, the insurance company does not respond and then asks for another 30 days. 30 days can seem like an eternity when you are out of your house and trying to get your life back together.