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Bad Faith Insurance Problems

Posted by: at 1:30 PM on November 15th, 2021

While many insurers fulfill their promises and adhere to the terms of their policies, some act in bad faith and unreasonably fails to uphold its promises. There are a number of situations that may signify your insurance company is acting in bad faith. Five of the most common ones include:

1. Lack of Communication

After an accident, timing is important. Therefore, if you find it especially difficult to get in touch with your insurance company, they may be giving you the runaround. Unfortunately, some insurance companies do this to try to avoid their duty to pay. It should be easy for you to communicate with your insurer and receive answers to all of your questions, as well as obtain the information you need for your claim.

2. Lowball Settlements

The reality is insurance companies, like other businesses, are on a mission to make money. For this reason, their goal is to pay as little as possible. If you find that your insurance company is pressuring you to accept a low, unfair settlement, you may have a bad faith insurance claim. This is particularly true if they tell you that this is the only offer that will be available to you, or there is no way for all of your expenses to be covered. An experienced insurance attorney can help you determine what type of settlement you should be able to collect.

3. Improper Claim Denials

Sometimes, insurance companies deny coverage for claims and hope their policyholders will just give up and pay for their expenses out-of-pocket. It is important to note that a claim denial does not automatically mean your insurer is acting in bad faith. Insurance companies do have a right to deny a claim, but they must have a proper reason for doing so. If your claim gets denied, you need to find out why.

4. Payment Delays

If you’ve been hurt in an accident, it’s likely that you are in need of compensation right away. There are a few tactics that insurance companies often use to delay providing their policyholders with the payments they deserve. If your insurer is asking you for excessive documentation and evidence, they may be doing so in order to deny your claim. Although some documents are necessary to investigate your claim, documents that are unrelated to your case should not be required.

5. Threats

If your insurance company told you that you’d face higher premiums or experience other consequences if you do not settle your claim, they are attempting to threaten you. They may also tell you that they’ll cancel your policy to try to scare you and convince you to accept a low settlement.

Obviously there are some good insurance companies out there, but many of them have built a reputation on denying as many people as they possibly can.

What Does the Contract Say?

The best place to start when figuring out if your insurance company owes you money is the actual contract that you signed when signing up. Check the agreement to make sure that you were completely covered before spending any money on a personal injury lawyer or court fees that might put you further into debt. Showing an insurance contract or agreement is one of your strongest assets in terms of the court.

Did They Deceive You?

A good practice when signing up for insurance companies is to record your conversations. If you can get a transcript of your insurance company conversations than this is quite helpful as well. Ask detailed questions through email or chat to make sure that the company cannot deny a conversation took place. 

Did You Pay for the Wrong Insurance?

It’s not uncommon to see people who purchased the wrong insurance because they didn’t read what they were paying for. If you purchase the wrong insurance then the courts cannot help you. In order to avoid this, take some measures to ask as many questions as you can before signing up for insurance. Although insurance seems tedious and boring, you would probably be better off not getting insurance at all if you don’t plan on reading the agreements.

Common problems with Insurance Companies

When working with insurance companies you might get frustrated because there is so much jargon in fine print that it’s difficult to understand exactly what you are signing up for. This doesn’t mean that you should let insurance companies take advantage of you just because you don’t understand everything.

Here are some common problems that people have with insurance companies that might justify talking with a lawyer.

The Insurance Company says You’re Not Covered

If you get injured or some of your property gets damaged, you think that your insurance company covers it. If the insurance company tells you that you are not covered then you might have a case to get more compensation. Insurance companies make their money by denying as many people as they can. They train their employees to figure out ways that they can deny coverage to people, and this often stretches the terms of the contract.

The Insurance Company Tries To Pay You Less Money

If an insurance company tries to pay you less money than you were originally promised then you should contact a personal injury lawyer as soon as possible. This is a common problem that people have with insurance companies because people don’t understand all the terms of their contract with the insurance company.

If at any point in time your insurance company tries to hike up your rates you should talk to a personal injury lawyer to see if they did this illegally. If you keep getting in car accidents then insurance companies can most definitely hike up your rates, but if they do it for no reason than they might just be trying to squeeze out a little bit more money from you.

Sadly, bad faith insurance is not an uncommon practice. If you think your insurance company is acting in bad faith, it is in your best interest to call LDM Law right away. We will schedule a free consultation and discuss the best options for you and your loved ones.   With over 40 years of experience, we will make sure that you get the compensation that you deserve.