Examples of Bad Faith in Insurance

• August 7 2024
• |   Insurance

No matter how careful you are, unforeseen situations can happen. It could be a car accident, a sudden fire that damages your home, or a work injury that causes you to be unable to work for a while. But because you always want to be prepared for such times, you have insurance policies and pay your premiums faithfully. When you do this, you expect your insurer to have your back during difficult times, but this is not always the case.

Your trust in your insurance provider can be shattered when they act in bad faith by putting their profits over your well-being. As an individual, you need to be able to rely on your insurance company to pay your claims without any hassle. Your insurance provider must give you a fair hearing and act in good faith. If your insurer wants to question you, they should do so promptly and investigate thoroughly. If they act unreasonably or fail to investigate your claim correctly, they act in bad faith.

From unjustified claim denials to deliberate delays in payment, bad faith practices can lead to unpaid claims, leaving you feeling betrayed and financially vulnerable. As a policyholder, you should know when your insurer acts in bad faith. In this blog, we will explore some examples of bad faith in insurance claim handling and shed light on the tactics used by insurers who act unjustly, so you will know what to do when you find yourself in this situation.

To better understand insurance bad faith, you can contact our lawyers. We know bad faith insurance law and can help you. If you or a loved one has been a victim of bad faith claim handling, you can contact us at Leverty & Associates Law.

Why Hire Our Attorneys to Help You?

At Leverty & Associates Law, our attorneys have extensive experience handling bad faith situations. We have in-depth knowledge of insurance law and understand insurers’ strategies to avoid paying legitimate claims. This expertise allows us to advocate for your rights and maximize your compensation effectively.

Our attorneys are fierce advocates who will fight relentlessly to ensure you receive fair treatment and the compensation you deserve. We are committed to holding insurance companies accountable for their actions taken in bad faith. We have a strong track record of successfully resolving bad-faith insurance cases for our clients, and we can help fix yours, too. You can rely on us. Contact us at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas) to know more about how we can help you.

Insurance companies often have powerful legal teams and resources dedicated to protecting their interests, but we are not intimidated by their power, so you can count on us.

Examples of Insurance Bad Faith

Understanding the various forms of bad faith practices can help policyholders recognize when they are being unfairly treated. Here are some common examples:

Unreasonable Delays in Processing Claims

The most common form of bad faith is the unnecessary delay in processing claims. Insurance companies are legally required to handle claims promptly and efficiently. However, some insurers intentionally delay the investigation, evaluation, or payment of a claim without a valid reason. These delays can cause significant stress and financial hardship for policyholders who rely on timely settlements to cover expenses.

The impact of such delays can be profound, affecting everything from medical treatments to the repair of damaged property. For example, imagine after a severe storm your roof is damaged; you file a claim with your homeowner’s insurance company, but your insurer repeatedly delays the inspection and processing of your claim for months. Each time you call, they tell you your claim is under review without further explanation. Meanwhile, your roof damage worsens, leading to additional repairs and costs. This insurer is acting in bad faith by delaying the claim process.

Unreasonably Denying Valid Claims

Another common bad faith insurance practice is denying valid claims without a reasonable explanation. This occurs when an insurer fails to conduct a thorough investigation or ignores clear evidence that supports the claim. When your insurer denies a legitimate claim without justification, it breaches the insurer’s duty and undermines the trust policyholders place in the insurance system.

Underpaying Compensation

Insurers acting in bad faith may offer settlements significantly lower than a claim’s actual value. This practice aims to minimize the payout and pressure you as a policyholder into accepting inadequate compensation. These offers can be particularly harmful when facing substantial medical bills, property damage, or other financial burdens. Accepting a low settlement can leave you without the funds to fully recover from your losses.

Poor Communication

Effective communication is crucial in any insurance claim process. Insurers may act in bad faith when they fail to respond to inquiries, provide updates, or explain policy provisions clearly. Lack of communication can leave you in the dark about the status of your claim and your rights under the policy.

Misrepresenting Policy Language

Insurers must represent the terms and conditions of their policies accurately. However, some insurance companies may intentionally misinterpret or misrepresent policy language to avoid paying claims. This can involve denying coverage based on vague or ambiguous terms created against your interests.

Our history of winning cases and securing substantial settlements shows our ability to deliver results.

Unfair Investigations

Insurance companies are supposed to conduct fair and impartial investigations when evaluating claims. Bad faith practices can include biased investigations, relying on inadequate or misleading evidence, and ignoring relevant information that supports the claim. Such actions are designed to justify the denial or underpayment of claims. Unfair investigations compromise the integrity of the claims process and can prevent you from obtaining the compensation you need.

Retaliation Against Policyholders

In some cases, insurers may retaliate against policyholders who file legitimate claims or complaints. This can include increasing premiums, cancelling policies without valid reasons, or refusing to renew coverage. Retaliatory actions violate the duty of good faith and fair dealing that insurers owe their policyholders. Such actions punish policyholders for exercising their rights and create a climate of fear and uncertainty, discouraging others from filing legitimate claims.

Is Your Insurance Provider Acting in Bad Faith? Let Us Help You!

Understanding the examples of bad faith insurance practices is essential for you as a policyholder to protect your rights and seek justice. If you believe you have been a victim of bad faith insurance practices, it is crucial to seek legal advice.

At Leverty & Associates Law, we are dedicated to fighting for your rights and holding insurance companies accountable. Our experienced attorneys can help you understand your rights, gather evidence, and pursue appropriate legal action against the insurer. Contact us today at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas); we offer free initial consultation.