What to Do When an Insurance Company Doesn’t Honor Your Policy
Most people carry several different forms of insurance to protect themselves in case of injury, accident, or other calamity. You expect your car insurance, health insurance, and homeowner’s or renter’s insurance to be there when you need it. So what do you do if your insurance company rejects a claim? Your insurance company may be acting in bad faith if it refuses to honor your policy, and it’s essential for you to be informed in order to ensure that you receive the benefits to which you are entitled.
A denial of your claim may not necessarily indicate bad faith; to prove that bad faith occurred, you must be able to show that the insurance company improperly denied your claim and knew that they had no basis for the denial. However, some common warning signs may be a red flag that your insurance company is acting in bad faith: dragging their feet in dealing with your claim, offering to settle the claim for an unreasonable amount, failing to adequately explain the reason for a denial, misrepresenting the facts of a claim or ignoring evidence, or advising you not to retain legal counsel. Insurance companies can save themselves quite a bit of money by delaying payment on a claim, convincing a client to accept a lowball offer, or refusing to pay outright—and if the policyholder doesn’t push back, oftentimes insurance companies get away with such tactics.
As a policyholder, you have rights. While the exact rules of what constitutes bad faith vary from state to state, insurance companies in every state must communicate completely and honestly with their clients about the terms of the policies it sells and their duty to their clients, settle claims in a timely fashion, and offer a reasonable settlement amount for claims. If you suspect that your insurer is acting in bad faith, you do not have to simply accept it. Start by complaining to your claims adjuster, preferably in writing. Document all of your interactions with your insurance company. Review your policy carefully, consulting a legal expert if necessary. In some cases, merely demonstrating to your insurance company that you are aware of their obligation to deal fairly with you and are familiar with the terms of your policy may be enough to resolve the situation.
Should such action not prove effective, however, it may be necessary to retain the services of a lawyer experienced in insurance bad faith claims. Bad faith claims are considered torts, which means that a plaintiff is entitled to recover punitive damages if the claim is proven. Thus, your insurance company may owe you much more than the face value of your policy, should the court find that its actions in denying or lowballing your claim were egregious. With so much at stake, insurance bad faith cases tend to be both complex and hard-fought, which means the assistance of a specialized attorney is essential.
If you feel that your insurance company has acted in bad faith, the law firm of Hodes, Milman & Liebeck can help. Contact us at hmlm.com or 886-730-1976 for a complimentary case evaluation.