When dealing with insurance claims, homeowners anticipate reasonable and quick treatment from their providers. Sadly, not every insurance company runs morally. Some might engage in "bad faith," giving profits over policyholder rights top priority. Knowing what a bad-faith actor is and spotting warning signals will enable homeowners to defend themselves and get the coverage they are due. Here's how to spot and deal with possible bad faith practices in insurance.
Dealing with Bad Faith in Insurance
In insurance, "bad faith" is unethical or dishonest behavior by an insurance firm meant to reject or postpone legitimate claims. Legally obliged to behave in "good faith," insurers should fairly process claims and respect policyholder rights. Insurers acting in bad faith when they fail to meet these responsibilities could include unnecessarily refusing, postponing, or underpaying a claim without good cause.
Common bad faith practices include:
- Unjustified claim denials
- Misrepresentation of policy terms
- Delaying claim responses or payments
- Offering significantly lower settlement amounts
Signs of a Bad Faith Actor
Identifying bad faith practices early can save homeowners time, stress, and potential financial losses. Some red flags to watch for include:
- Unclear Communication: Insurers acting in bad faith often avoid direct or clear communication. If your adjuster or claims representative consistently avoids questions, deflects responsibility, or fails to provide policy explanations, this could be a warning sign.
- Frequent Requests for Redundant Information: If the insurer repeatedly asks for the same documents or information, it may be a stalling tactic.
- Unjustified Delays: While some delays are expected, consistent or prolonged delays without a valid reason can indicate bad faith.
- Low Settlement Offers: If an offer seems significantly lower than expected or the insurer pressures you to accept without justification, it's wise to scrutinize further.
What Homeowners Can Do
If you believe bad faith exists, record every contact with the insurer. Record emails, phone calls, and any given paperwork exactly. Record dates, names of representatives, and the nature of every contact, if at all feasible.
Think about raising the complaint inside the insurance company. If your adjuster is not giving enough responses, ask to talk with a claims manager or supervisor. Complicating a complaint with your state's insurance agency can also force the insurer to perform ethically since insurance officials take bad faith actions highly under consideration.
When Should One Ask For Legal Help?
See a qualified attorney who specializes in insurance conflicts if the insurer's behavior still points to bad faith. Depending on your circumstances, an attorney can negotiate with the insurer, evaluate your matter, or even bring a lawsuit. Legal action might assist in guaranteeing you just compensation as due.
Conclusion
Acknowledging bad faith tactics helps homeowners avoid unethical insurance policies. Homeowners can better defend their rights by knowing what bad faith is, keeping alert, and recording everything. When necessary, seeking assistance guarantees equitable treatment and quick resolution of claims.