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Bad Faith Insurance Practices

After timely payments on your premium, and faithful customer loyalty to your insurance company for years, it may come as a shock to discover that your insurer may not be as compassionate to you as you would’ve hoped. The haunting truth is that though insurance companies are not purposely wicked, however their loyalty ultimately lies with profits.

The attorneys at Millin & Millin PLLC are aware of the dubious nature of insurance companies and so they strive to provide their clients with the most reliable legal consultation when facing civil litigation challenges – especially against these large business entities.

There are a number of issues that can arise when dealing with insurers and one of the worst is bad faith insurance. Unfortunately, customers aren’t usually cognizant of bad faith insurance until they are attempting to file a personal injury claim. This is when bad faith denial of claims begins to emerge, which is illegal, and which can affect the claims tremendously.

Fortunately, with the right team of attorneys by your side, you can fight these illegal actions and gain back the benefits that are rightfully yours. Because bad faith insurance is unlawful, companies are susceptible to fines and punitive damages, which can run into the hundred of thousands of dollars or even the millions.

When negotiating insurance claims, adjusters may act in bad faith.

Bad faith insurance practices are the refusal, denial, underpayment or delay of a legitimate claim by a policyholder. When an adjuster of the insurance company denies a claim for no reason, then it could be that your insurer is acting illegally.                                               

Bad faith is whenever an insurance company:

  • Fails to perform a proper investigation into a claim within a reasonable amount of time.
  • Misstates contract language in order to avoid a payout.
  • Makes irrational demands to prove a loss is covered.
  • Does not fully disclose policy limitations or exclusions prior to purchase.
  • Refuses to negotiate a just settlement despite noticeable liability.
  • Utilizes laws improperly so they can deny your claim.
  • Uses evidence to deny a claim rather than support it.
  • Fails to provide a coherent explanation in writing for denying your claim.
  • Switching the adjusters assigned to your case for the purpose of delaying negotiations.
  • Fails to negotiate in a timely manner in an attempt to let the statute of limitation expire.

Unfortunately, bad faith practices occur way too often, especially because insurance companies maliciously take advantage of the fact that most policyholders aren’t always aware of their rights or legal options when being mistreated.

Bad Faith Insurance Laws

Thankfully, there are laws set in place to help prevent bad faith insurance practices from occurring. These laws allow individuals to to take legal action from mistreatment and protect policyholders from unethical practices.

If your insurer continues to deny you a fair settlement, then you can file a complaint with your state insurance board. An investigation will help to determine if the insurers were acting in bad faith. However, the insurance board can only levy fines against the company, but CANNOT force them to pay a claim. This means you’ll need a competent and experienced law firm like Millin & Millin PLLC to help you file a suit against them.

When is it Not Bad Faith?

A simply disagreement between an insurance adjuster and policyholder about the total loss amount does not necessarily represent a bad faith practice. It is important to remember that a simple mistake or error caused by the insurer does not necessarily mean that they were acting in bad faith.

Who is the Claims Adjuster?

Claims adjusters are employed by the insurance company to help process claims. Their responsibilities include:

  • Investigating personal injury claims against their insured.
  • Formulating reasons to deny claims.
  • Determining if the policyholder’s actions may have caused the accident.
  • Deciding the maximum amount a settlement will pay.
  • Offering to settle for the lowest amount that can be justified.

Is Your Adjust Acting in Bad Faith?

If you are under the belief that your adjuster is acting illegally, then the first thing you will want to do is file a complaint with that adjuster’s supervisor. Note the reasons why you believe the adjuster is negotiating in bad faith and discuss your concerns with the supervisor. Make sure that you do not initiate the conversation with threatening to file a suit as this will only cause them to treat you as a disgruntled customer rather than with the consideration you deserve

 

Inform the supervisor that:

  • You have submitted all required documentation to support your claim.
  • You have complied with all the adjuster’s requests.
  • The adjuster has made unnecessary or irrational requests.
  • Provide them with examples in which you feel they were acting in bad faith.

To be taken seriously it will exceedingly vital that you gather (and offer) as much proof of the bad faith dealings as possible. Always take good notes when talking with your adjuster so that you can provide viable examples of the bad faith tactics.

After the discussion with the supervisor, send them a certified letter that confirms the date and time of the conversations. Also reiterate the reasons you believe the adjuster is acting illegally.

When You Need an Attorney

If after several attempts to rectify the issue, and negotiate the claim effectively, the insurance company continues to act in a malicious manner, then contact Millin & Millin PLLC immediately. Bad faith lawsuits can be complicated, but our experienced lawyers have the know-how to deal with any insurance company – big or small.

We know that pursuing a case against a company on your own can be intimidating. That’s why we want to be the support you need and deserve. Call the Millin & Millin PLLC offices today at 956-631-5600 to help you secure the coverage and benefits you are owed.