Insurance companies of all kinds are notorious for being tight fisted about reimbursing you for claims. Whether you have been in a car accident, had significant hurricane damage to your home or you are seeking coverage for a health insurance related issue, the universal factor is having to deal with insurance companies, claims and adjusters. When you purchase an insurance policy, you are entering into a binding contract with the firm. As you pay your premiums each month and year, you are holding up your end of the bargain and when something bad happens to you, they are supposed to hold up their end.
All too often, insurance companies are more interested in their bottom line than they are in holding up their end of your contract. This is why attorneys are called to get involved in so many insurance claims – because otherwise the insurance company may think that can get away with bad faith insurance representation. Bad faith insurance occurs when an insurance company unfairly and incorrectly denies a claim by a member of their insured constituency.
Insurance companies can commit "bad faith insurance" activities several ways.
- An insurance company can delay examining an insurance claim. This means that they may delay calling you back in regards to a claim, they may hesitate to send out an adjuster or facilitate a meeting with an adjuster, or they may just ignore your claim altogether for a significant period of time.
- An insurance company may unjustly delay paying out on a claim. Your claim may have been approved by the adjuster and then be held up by red tape within the insurance company. Perhaps they are suddenly demanding alternate methods of proof or they continue to maintain that they have sent payment, when they have not.
- An insurance company may suddenly interpret the insurance policy in an unreasonable fashion. Perhaps they have a special clause, or they have decided that your claim can be manipulated to no longer fit within the bounds of the contract. This can be seen in most of the Hurricane Katrina cases against insurance companies as they argue over damage caused by the hurricane and windstorm versus flood insurance coverage.
- An insurance company may improperly deny your claim outright and refuse to settle your claim or case and pay for your loss.
Insurance Bad faith is a breach of the insurance policy contract between you and your insurance company and, as they delay, they are also responsible for any losses or injuries sustained or created by their delay to process the claim in good faith. If it can be proven that an insurance company is acting in bad faith and that they are being unreasonable or misleading, a policy holder can file an insurance company lawsuit to get compensation and punitive damages that exceed the amount of the original insurance policy.
Bad faith insurance can occur in association with any insurance company. Bad faith insurance claims have been filed against HMO’s and managed healthcare organizations, homeowner’s insurance companies and disability insurance companies.
If you feel as though you’re insurance company has acted in bad faith in handling your insurance claim or if your claim has been unfairly denied, you may have the basis for a lawsuit against your insurance company. You should contact an attorney as soon as possible if you feel this is happening to you.