Bad Faith Altering Insurance Claim Reports
Changing insurance claim reports is a major problem that may have major effects on the policyholder as well as the insurer. "Bad faith" in the insurance business is the unfair behavior of an insurance company meant to prevent paying a legitimate claim. One could argue that changing claim reports to minimize or deny payments amounts to bad faith. Here's a closer look at how changing claim reports could affect a claim and how bad faith might be categorized.
What In Insurance Would Constitute Bad Faith?
Bad faith results from tactics that unfairly delay, deny, or underpay a claim or from an insurance company purposefully misreading the facts of a claim. Legally obliged to behave in good faith, insurance companies have to treat claims fairly and honestly in line with the policy terms. Changing the specifics of damage or lowering the projected repair costs will help to alter a claim report and demonstrate bad faith since it immediately affects the insured's capacity to get just recompense.
Changing Claim Reports: A Standard Bad Faith Strategy
Sometimes, insurers would change claim records to lower their compensation. Adjusters that minimize the degree of the damage, remove some required repairs, or distort data in the report to support a smaller settlement could all cause this. For instance, should a policyholder file a claim for significant storm damage and the adjuster changes the report to indicate small damage, the insurance company's pay-off would be less.
Bad faith is obviously shown if an insurer changes a report without telling the policyholder or misrepresents the results of a claim. Policyholders should be aware of this risk and carefully evaluate claim records to guarantee they accurately represent the nature of the loss.
Legal Fallout From Changing Claim Reports
Should an insurer be discovered to have changed claim records in bad faith, they can be subject to legal action. Should the policyholder be successful in their lawsuit against the insurance company for bad faith behavior, they could be reimbursed more than just the initial claim—including punitive damages and attorney fees. Courts treat bad faith claims with great respect, particularly in cases when insurers purposefully mislead policyholders.
Policyholders' Action
Should a policyholder believe their insurance claim report has been changed, they should ask for a copy of the complete report and cross it over with their own damage records. Consulting an attorney knowledgeable in insurance law or an independent adjuster will also assist you in creating a case against the insurer for bad faith behavior.
Conclusion
If done to minimize or reject a legitimate claim, changing insurance claim reports is seen as bad faith. Should policyholders believe their claim has been improperly changed, they should be alert, carefully document damages, and consult legal counsel.