As a policyholder, you expect the insurer to make good on their promise to cover your expenses when you need them to. After all, you have been paying insurance premiums faithfully as stipulated by the policy.
However, it is not always smooth sailing. Some insurers are usually not so eager to settle claims, even if they are valid. When this happens, the insurer can be said to be acting in bad faith, and you ought to take appropriate action to protect your legal rights.
What actions amount to bad faith?
Denying a claim does not necessarily mean that an insurer is acting in bad faith. There are several legal reasons for denying a claim, such as mistakes in the paperwork to disputes in liability for third-party claims.
Acting in bad faith involves intentional dishonesty by an insurer or an attempt to go back on their legal obligations. Bad faith insurance practices may include:
- Failure to investigate or respond to a claim
- Denying a claim without legitimate reasons
- Intentionally delaying the claims process
- Misleading or deceiving the policyholder with false information
- Fraudulently adjusting claims to shortchange the policyholder, among others
If your insurer is playing hardball and is unwilling to pay up according to the policy terms, you may have a valid case against them.
What can you do about it?
The best-case scenario is when you sort things out amicably with the insurer and resolve the matter in the shortest time possible. However, if that is not possible, it may be best to pursue other legal options.
You can file an insurance bad faith lawsuit against the insurer where you may be awarded more than the policy limit. If the insurer’s actions in bad faith caused you additional harm or losses, you deserve compensation for that as well. It is advisable to get legal assistance to guide you through the entire process and help you recover what you are entitled to after a wrongful denial of your claim.