Dealing with denied insurance claims can be draining, especially if you have to rely on your coverage to manage unexpected losses. Without proper guidance, the complexities of claim disputes can lead to financial distress or missed opportunities for you.
Keep reading to learn what to do if your insurance claim is denied and how a bad faith insurance attorney can fight for your interests.
Valid Reasons Insurance Claims Are Denied
Before you decide on how to respond to your insurance claim getting denied, it’s important you determine whether the denial is based on bad faith or a valid reason. Typically, insurance companies deny claims for a handful of common reasons, including:
• Failure to Pay Premiums: If you fail to pay your premiums on time, the insurer may deny your claim.
• Insufficient Documentation: Your claims may be denied if you fail to provide the necessary evidence or documentation required to support it.
• Filing Outside Coverage Period: Claims submitted outside the policy’s coverage period will be rejected.
• Policy Exclusions: Some situations or damages may be excluded under the terms of the policy.
• Misrepresentation: Your claim can be denied if you provide incomplete or inaccurate information.
Keep in mind that not every case of damage will be covered by insurance. For instance, while Texas does require a level of liability coverage, an accident caused by an uninsured motorist may not be covered.
If you’ve had your insurance claim denied in Texas for a valid reason, you won’t be able to pursue further compensation. However, it’s still a good idea to consult an insurance attorney like Millin and Millin Attorneys to review the insurance claim denial and explore your options.
Bad Faith Reasons Insurance Claims Are Denied
If an insurance company denied your claim in bad faith, that means they’ve acted unreasonably by breaching their duty to you, the policyholder. Bad faith insurance claim denials are illegal and can open the door to legal action. Below are some common bad faith tactics insurance carriers use:
• Delays: Unreasonable delays in investigating or processing claims without a valid explanation.
• Invalid Exclusions: Incorrectly applying exclusions or misrepresenting policy terms to deny a valid claim.
• Insufficient Information: Failure to provide clear reasons why a claim was denied, leaving the policyholder in the dark.
• Late Payouts: Refusing to pay claims within a proposed period, even after the policyholder fulfills all requirements.
• Failure to Investigate: Improper investigation or ignoring evidence that supports the policyholder’s claim.
• Undervalued Claims: Not offering enough compensation despite the claim being valid and covered under the insurance policy.
What To Do If Your Insurance Claim Is Denied in Bad Faith?
If you’ve had an insurance claim denied due to bad faith, it’s important that you take action immediately to protect your rights and seek the compensation you deserve. Here are some of the steps you should consider:
• Document Everything: Document all communications with your insurer. This includes phone calls, emails, letters, and any correspondence related to your claim. Supporting documentation can be vital in proving bad faith.
• Consult a Bad Faith Insurance Lawyer: Getting help from experienced lawyers in bad faith insurance claims can help you assess your situation, offer legal guidance, and determine if you have grounds to file a lawsuit.
• Review Your Policy: Carefully inspect your home, health, life, or auto insurance policy to understand the insurance coverage you’re entitled to and whether the insurer’s denial is valid. Understanding your rights can help you spot if the insurer has made an unjust decision.
• Request an Explanation: Request a clear explanation of why your insurance adjuster denied your claim. They have to provide a reasonable reason, which can force them to expose bad faith practices.
• Appeal the Decision: You can go through an appeals process with your insurance carrier to seek out a better outcome and attempt to change the insurance company’s decision.
• Contact Your State’s Insurance Department: Each state has an insurance regulatory body. If you feel your claim was denied in bad faith, or your appeal has been rejected, file a complaint with the Texas Department of Insurance. They may investigate and intervene.
• Send a Demand Letter: If the TDI is unable to resolve the issue, you may need to send a demand letter to your insurance company laying out what you feel you are owed and why.
• File a Lawsuit: If the insurance company fails to meet your demands, your lawyer may suggest filing a lawsuit against the insurer. A bad faith insurance lawsuit can add extra claims for damages beyond the original policy limits, including punitive damages and emotional distress.
• Explore Alternative Dispute Resolution (ADR): Sometimes, your bad faith attorney may recommend alternative methods like mediation or arbitration to resolve the issue without going to court. These methods usually save you time and money.
In addition to the efforts you can take to attempt to get the coverage you’re owed from your insurance company, there are methods for getting funding for home damage. You can contact the Federal Emergency Management Agency (FEMA) to learn if you qualify. Make sure to also carry out any necessary and major repairs while you attempt to get coverage.
Do You Need a Bad Faith Insurance Attorney?
Yes, you will likely need a bad faith insurance attorney if your claim has been denied in bad faith. Companies in the insurance industry usually have large resources and legal teams to protect their interests. This can make it difficult for you to get the coverage you deserve.
Consulting skilled attorneys like Millin and Millin Attorneys can level the playing field and help you uphold your rights. Here’s why you should consider hiring an attorney:
• Experience With Bad Faith Claims: A bad faith insurance attorney understands the complexities of insurance law and recognizes bad faith tactics that you might miss.
• Maximize Compensation: They can help pursue compensation past the original claim amount, including punitive damages.
• Handle Legal Complexities: Your attorney can manage the legal claims process, allowing you to focus on other aspects of your life.
• Increase Success Rate: Legal representation can boost your chances of winning a bad faith lawsuit.
Compensation Available Through Bad Faith Insurance Claims
If your insurance company is found to have acted in bad faith, you may be entitled to compensation beyond the initial policy limits. This compensation addresses the damages you suffered and the insurer's misconduct. Here are the types of compensation that may be available:
• Policy Benefits: You can recover the cost of the original wrongfully delayed or denied claim.
• Consequential Damages: These are extra damages caused by the insurer’s actions such as emotional distress, financial losses, or other hardships that resulted from the denial.
• Punitive Damages: In cases where the insurer's behavior was particularly wrongful or harmful, punitive damages may be awarded to penalize the insurer and deter future misconduct.
• Attorney’s Fees: If you win your bad faith case, the insurer may be required to pay your legal fees.
Consult Millin and Millin Attorneys for Your Bad Faith Insurance Claims
The challenges of a denied insurance claim can be stressful and confusing. Understanding your rights and the steps to take when facing bad faith practices can make the difference in securing the compensation you deserve. If you’re facing a denied car insurance claim or a denied homeowners insurance claim, don’t hesitate to get help from a capable bad faith law firm.
Consult a bad faith insurance attorney like Millin and Millin Attorneys for proper legal guidance that suits your situation. Our experienced attorneys can provide valuable insights, protect your rights, and help you pursue the justice and compensation you are entitled to under your policy.
Consult Millin and Millin Attorneys today for guidance on your insurance claim and potential recovery options!
