Facing bad faith insurance can feel overwhelming, especially when you need the coverage to recover from unexpected hardships. When insurance companies act in bad faith, policyholders may face unfair financial issues that can negatively affect their lives.
Understanding bad faith insurance practices can help you protect your rights and ensure you get the compensation you deserve. Keep reading to learn more about what bad faith insurance is, some bad faith offenders in the industry, and how a Texas bad faith insurance lawyer can help you hold insurers accountable.
What Is Bad Faith Insurance?
Bad faith insurance happens when an insurance company fails to fulfill its responsibility to a policyholder. It’s a breach of the insurer’s obligation to act in good faith and deal fairly with the client when handling a claim. Some of these practices include delaying payments, denying a valid claim without a reasonable basis, or failing to investigate claims properly.
While insurers don’t have to pay every claim, they must clearly explain why your claims are denied and adhere to the policy's terms. When the insurance company ignores insurance contract provisions, misrepresents contract terms, or refuses to cover claims that meet policy requirements, they are acting in bad faith. Understanding your rights as a policyholder can help protect you from these unethical tactics.
Common Bad Faith Insurance Tactics
Sometimes, insurance companies may use different tactics to avoid fulfilling their responsibilities to policyholders. These practices can be damaging and result in unjust delays or denials.
• Misrepresenting policy terms to deceive or confuse the policyholder
• Failing to respond to policyholder inquiries or claims on time
• Postponing investigations to escape paying out valid claims
• Denying claims without a rational basis, even when coverage clearly applies
• Downplaying or ignoring evidence that supports the claim
• Unreasonable requests for extra documentation or proof of loss
• Refusing to settle or negotiate claims in good faith despite clear liability
• Failing to provide clarifications for claim denials, leaving policyholders in the dark
To learn whether or not your insurance company’s actions may constitute bad faith, it’s a good idea to consult with a bad faith insurance lawyer.
The Worst Insurance Companies for Bad Faith
Some insurance companies have been more frequently associated with bad faith practices, which result in numerous lawsuits and complaints. While bad faith can occur with any insurer, some companies have been specifically noted for unethical tactics.
• State Farm: State Farm has been accused of forging signatures and altering engineering reports to deny claims after Hurricane Katrina.
• Allstate: Known for its lowball offers and aggressive litigation tactics, Allstate allegedly uses confusing language to mislead policyholders.
• Unum: Allegedly known for delaying and denying rightful claims, these series of events made a California Insurance Commissioner label Unum an “outlaw” company.
• Anthem: Anthem has faced penalties from the government for denying valid claims and canceling policies for pregnant and chronically ill clients.
• AIG: AIG was accused of mistreating policyholders and raising premiums after disasters, which gave it a reputation that’s tied to corporate fraud charges.
• Farmers Insurance: Consumer Reports and JD Power reported that Farmers Insurance allegedly incentivizes adjusters to meet low-payment goals.
• UnitedHealth: UnitedHealth is allegedly famous for having incredibly low reimbursement rates and claim delays.
• Liberty Mutual: Using methods similar to State Farm and Allstate, Liberty Mutual was allegedly accused of increasing denials and delays as a cost-cutting measure.
• Progressive: Progressive was criticized for not handling claims properly, especially with cases that involved injured children.
• Global Life: This insurance company was accused of discriminatory pricing practices like charging minority clients higher premiums than Caucasian clients.
What To Do if Your Insurance Carrier Acts in Bad Faith
If you believe your insurance company is acting in bad faith, taking immediate action can help you protect your rights and financial well-being. Here’s what you can do:
• Review Your Policy: Ensure you’re fully aware of your coverage and the reasons for the denial. This will help you determine whether the insurer’s actions are unreasonable.
• Consult an Attorney: A lawyer specializing in bad faith insurance like Millin and Millin Attorneys can help you navigate the legal process and determine the right course of action.
• Document Everything: Record all claims, communications, and responses from the insurer. This evidence is important for any legal action you may take.
• Notify the Adjuster: Contact the insurance adjuster to address your concerns. You can do this in writing and request a resolution.
• File a Complaint: If the insurer continues to act in bad faith, work with your attorney to file a complaint with your state's insurance regulatory body.
What Compensation Can Be Won Through a Bad Faith Insurance Claim?
If you win a bad faith insurance claim, you may be entitled to different forms of compensation. This compensation is meant to help cover the emotional and financial harm that was caused by the insurer’s wrongful actions.
The amount and type of compensation you receive depends on the specifics of your case. Some determining factors include:
• Policy Benefits: You may receive the sum originally owed under the insurance policy that was wrongfully denied.
• Consequential Damages: This includes extra losses caused by the insurer’s actions such as property damage or financial difficulties caused by the denial.
• Emotional Distress: You may also be given extra damages for the stress, anxiety, and emotional toll the insurer’s misconduct caused.
• Punitive Damages: If the insurer’s behavior was particularly wrongful or harmful, the court may award punitive damages to punish the insurer and avoid future misconduct.
• Attorney’s Fees: If you win, the insurer may be told to cover your legal costs.
Do You Need a Bad Faith Insurance Attorney?
If you’ve been treated in bad faith by an insurance provider, it’s in your best interest to contact an attorney. Hiring a bad faith insurance attorney like Millin and Millin Attorneys can greatly improve your chances of winning a claim.
Here’s how a bad faith insurance attorney can help your case:
• Unbeatable Knowledge: Insurance laws vary by state, and an experienced Millin and Millin attorney knows the ins and outs of these laws. They’ll ensure your claim is handled properly.
• Case Evaluation: A lawyer can assess your situation, determine if you have a valid bad faith claim, and help you understand your legal options.
• Navigating Complexities: Insurance companies have wide resources and legal teams. A skilled attorney can level the playing field and protect your rights.
• Negotiation Skills: Attorneys are skilled negotiators who can help you secure a fair settlement or take your case to trial if necessary.
• Maximizing Compensation: Lawyers know how to calculate the full extent of damages, including consequential losses, emotional distress, and punitive damages.
Contact Millin & Millin Attorneys for Your Bad Faith Insurance Claims
Dealing with bad faith insurance tactics can be frustrating. But knowing your rights and the steps to take when your insurer fails to carry out its responsibilities can help you improve your chances of a fair outcome. If your insurance company acted in bad faith, your next step should be getting a lawyer.
Partnering with a Texas bad faith insurance lawyer like Millin & Millin Attorneys can get you the legal support you need to get through the difficulties of your case. Their skills ensure your rights are protected, and they’ll work tirelessly to help you secure the compensation and justice you deserve.
Contact Millin & Millin Attorneys today for expert guidance on your bad faith insurance claim and recovery options!
