According to the laws in the United States, insurance companies must act in good faith and be fair when dealing with the persons that they insure and when settling claims. If the insurance company does not act in good faith, you may be able to file a bad faith tort claim against them. Unfortunately, it is very hard to prove bad faith, and you must be able to prove that a company is acting in bad faith in order to win your case. If you feel like an insurance company is treating you unfairly, you may find yourself wondering if you potentially have a bad faith injury case against the insurance company. Here are a few of the most common signs that an insurance company is not acting in good faith in regards to your insurance claim.
An Insurance Company is Denying Your Claim Without a Valid Reason
One of the signs that an insurance company may be acting in bad faith is by denying your claim without a valid reason. There are a number of reasons why an insurance company can legally deny an insurance claim. The insurance policy may not have been valid on the date when you are alleging coverage was needed, or the company may have investigated and deemed you do not have a valid claim. In other cases, coverage can be denied if the claim was not filed before the statute of limitations tolled. While there are many valid reasons an insurance company can use to deny a claim, in all of those cases, they must tell you why they are denying the claim and tell you what your rights are when it comes to appealing that decision. If a company refuses to tell you why they are denying your case, and they continue to deny your case despite you appealing that decision, they are acting in bad faith.
An Insurance Company is Not Negotiating a Settlement in Good Faith
Another sign that an insurance company is acting in bad faith is that they are not fairly negotiating a settlement amount, or working in good faith toward a settlement. It is not uncommon for an insurance company to start negotiations low for insurance settlements. This alone is not a sign of bad faith. However, if a doctor is saying you need a lot of treatment, and the insurance company is offering a ridiculously low amount of money, and they refuse to go up, they may be acting in bad faith. If they cannot justify how they came to the amount they are offering and why they refuse to increase their offer, a judge may find that they are being unreasonable and not acting in good faith. This is one of the hardest types of bad faith cases to prove, as settlement amounts are usually subjective, so an insurance company typically has to be blatantly lowballing in order to prove bad faith when it comes to negotiations.
The Insurance Company is Delaying or Stalling on Payments
Most states require an insurance company to pay out different types of payments within a specified period of time. For example, a workers compensation insurance company may only have 14 to 30 days to make payments after accepting a workers compensation case. Most insurance companies also only have 30 to 60 days to pay out on settlements, based on the type of claim that was filed and the state the claim was filed in. If an insurance company is delaying or stalling on making a payment, they may be acting in bad faith. Most states have laws that require insurance companies to pay penalties if a payment is not made by the date that is legally due. Missing a payment and paying a penalty does not show that the company is acting in bad faith. However, if they miss multiple payments, and they are not paying out what they owe plus paying the penalties, a bad faith claim may be filed to compel them to pay the amount due, plus an additional fee for acting in bad faith.
An Insurance Agent is Making Illegal or Threatening Statements
One of the most obvious signs that an insurance agent or an insurance company is acting in bad faith is making illegal or threatening statements. Some insurance companies may try to intimidate you into dropping an insurance claim. They may make threats against you, including bodily harm or the threat of canceling your insurance policy. Threatening you to get you to drop your insurance claim is illegal, and is a tell-tale sign of bad faith. If an insurance company is threatening you, it is best to get the threats in writing, or record the conversations, if it is legal to do so in your case. It can be hard to prove this is occurring if it becomes a he-said, she-said scenario. Additionally, if you feel an insurance agent is threatening you, it is important to document the threats in writing by emailing the agent and their supervisor or someone higher up in the company. You want to be proactive in showing that the threats are company-wide, and not just a rogue agent.
The Insurance Company is Misrepresenting Their Policy or Related Laws
The final reason why you may be able to file a bad faith case against an insurance company is that they are purposely misrepresenting their policy or related laws. Most insurance agents and insurance companies are well-versed in what their policies state and what the laws allow with specific types of policies. However, some agents or companies may try to twist the wording in their policy or twist laws to try to deny a claim or get you to drop the insurance case. An insurance company that purposely misrepresents what their policies state or what the law states is acting in bad faith. If you can show that an agent is purposely twisting what they are telling you with the specific intent of not having to pay on your claim, you meet the legal threshold that is needed to bring this type of claim against an insurance company.
Proving that an insurance company is acting in bad faith can be challenging. This is why it is so important to have an attorney represent you in a bad faith injury case against an insurance company. An attorney can work to show how and why the insurance company is not acting as they should. If you are ready to find out if you have a case against an insurance company, or need the help of an attorney, to bring a case against your insurance company, The Wininger Law Firm is here to help you. Call us today to learn how to get started.