It's no secret that the insurance industry can be tricky. Insurers often find ways to deny claims, even when it seems obvious that the policyholder is in the right. As a consumer, you have certain rights and protections when you purchase an insurance policy. The insurer agrees to provide coverage for certain risks, and in exchange, you agree to pay premiums. This is a legally binding contract, and both parties are expected to uphold their end of the bargain.
When an insurance company acts in bad faith, it means that the company has failed to meet its obligations. This can take many different forms, such as failing to properly investigate a claim or refusing to pay a valid claim in a timely manner. Our Texas attorneys at The Voss Law Firm explain what qualifies as a bad faith claim, and what to do about it.
Examples of Insurance Bad Faith
When an insurance company wrongfully denies a legitimate claim, it is said to be acting in bad faith. If you can prove that your insurance company has acted in bad faith, you may be entitled to punitive damages. Punitive damages are designed to both compensate the injured party and punish the insurance company for its unfair business practices. In order to recover punitive damages, you must typically show that the insurance company knew or should have known that its actions were wrongful. Although punitive damages are not available in every case, they can provide a significant financial recovery for policyholders who have been harmed by an insurance company's bad faith practices.
Some bad faith insurance practices include:
Changing or Cancelling Your Policy
If you find yourself in a situation where your insurance company has canceled or made changes to your policy without prior notification, it is important to understand your rights. This is typically done in an effort to minimize the compensation you receive or deny coverage completely. However, the eligibility of the claim is based on the original policy terms, not the newly revised policy. It's a good idea to keep an original copy of your policy.
Delaying Payment on a Valid Claim
Another indication that your insurance company is acting in bad faith is using delay tactics to slow down the process that would lead to a fair settlement. One of the tactics used by an insurance provider is to make unreasonable demands for documentation and evidence. For example, they may request multiple copies of the same document or information that is not relevant to the claim. They may also drag their feet in scheduling appointments or responding to communications.
Pressue to Accept an Unfair Offer
One tactic that insurance companies may use if they are acting in bad faith is to pressure you into accepting an unfair settlement. They may try to convince you that no other offer is available or that your policy does not cover the expenses you were expecting. If you are facing this situation, it is important to remember that you have the right to seek legal counsel. An experienced attorney can help you understand your rights and options, and will fight to ensure that you receive the full benefits you are entitled to under your policy.
Lack of Communication
When you file an insurance claim, you expect the company to acknowledge receipt of your documentation and begin working on an investigation as soon as possible. However, some insurance companies intentionally avoid communicating with their customers in an effort to avoid paying out claims. This is known as bad faith insurance, and it can be incredibly frustrating for policyholders who have already been through a difficult experience.
Let Us Advise You on Your Insurance Bad Faith Lawsuit
If you’re tired of fighting with an insurance company, the Voss Law Firm can help you get the compensation you deserve. Call us at 1-888-614-7730 or complete our contact form today to get answers to your questions, or start reading your copy of our free book, Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse, and Refuse.