Bad Faith Insurance Companies
What is bad faith insurance?
In the United States, most insurance companies are bound by what is known as an “implied covenant of good faith and fair dealing.” What this means is that an insurance company has certain duties to its policyholders such as the obligation to thoroughly investigate all claims in a timely manner. In the case that an insurance claim has not been investigated thoroughly (or at all) or has been wrongfully denied, an insurance company has committed an act of “bad faith.”
These are a few different ways an insurance company can act in bad faith:
- Failing to investigate a claim in a timely manner
- Failing to settle a case or cover damages fairly
- Unreasonably denying or delaying benefits to a policyholder
- Failing to defend a liability policyholder who has been sued in a liability case
If your claim is clearly covered by your insurance policy and you have lived up to all terms of your contract, and your insurance company still denies or delays the benefits of your claim, you may be a victim of a “bad faith” insurance company.
What to do if you believe your insurance company has committed bad faith
First and foremost, review your insurance contract to be sure you haven’t missed any policies that may have caused your claim to be denied. If you are confident that your claim should not have been denied under the contract, gather all correspondence between you and your insurer and documentation necessary to make a final appeal to your insurance company’s Director of Claims.
If your are once again denied, you may want to consider contacting an insurance attorney. Once your attorney reviews all documents including your contract, evidence related to the claim and correspondence between you and your insurer, he or she will be able to determine if you have a bad faith case against your insurance company.