After a car crash, massive storm or house fire, you’ll turn to insurance to help you repair your vehicle, fix your house or even completely rebuild your home and replace your property. Have someone making a large claim, you probably want the maximum amount of benefits possible under your coverage.
Unfortunately, the insurance company probably wants to keep what they pay you as low as possible. Most of the time, negotiations between policyholders and insurance companies result in a compromise that benefits everyone.
In some rare cases, insurance companies may go too far in their attempts to keep costs low and could even run afoul of the law by engaging in bad faith insurance practices. If you experience any of the three behaviors below while handling a claim, that might be a warning of bad face insurance.
Denying a claim that clearly falls under the coverage of the policy
Sometimes, but people misunderstand what kind of coverage they have or they mentally think they have paid for more protection than they really carry. After you review your policy and know when you can make a claim and what the company should cover, you will then have an easier time identifying unfair denials.
Delaying the payout while you wait for repairs or carry the costs
Not everyone has enough liquid capital the pay for a brand new roof on their house or thousands of dollars worth of car repairs without any forewarning. You may have had to finance the services you need immediately and could be paying high interest rates because you used a credit card.
You may also be in a position where you can’t pay at all and need the insurance company to pay so that you can have the work done. Continually delaying responses to claims and pushing back the payout could also be bad faith insurance.
Tricking you into settling without actually giving you a fair offer
Insurance settlement offers frequently fail to reflect the true value of a claim. This is particularly true of a first settlement offer. For those in desperate need of financial assistance may accept the settlement without considering the long-term financial implications of their decision.
When someone settles a claim, even if they later rack up tens of thousands of dollars in additional costs, they won’t be able to get the insurance company to pay any more for their claim.
Recognizing the warning signs of bad faith insurance can help you handle a claim more carefully and get help when you need it. You may even need to prepare for insurance litigation to hold the company responsible for its bad faith practices.