Insurance Bad faith is broadly considered to be dishonest dealing, and encompasses a wide range of practices by insurance companies.
These examples of bad faith insurance practices may help you identify whether your insurance company has been acting in bad faith.
Examples of Insurance Bad Faith:
- Denying a claim without giving a reason
- Failing to conduct a prompt and complete investigation
- Offering less money than a claim is worth
- Delaying or denying decisions on claims or requests for approval for medical treatment
- Refusing to pay a valid claim
- Making threatening statements
- Misrepresenting the law or policy language
- Putting insurance company profits over a policyholder’s valid claim
- Delaying payment of a valid claim
- Refusing reasonable requests for documentation
Denying a claim without giving a reason
Insurance companies should always give a reason for claim denials. If your insurance company has denied a valid claim without giving any reason whatsoever, or has denied your claim for an invalid reason, you may have a claim against your insurance company for bad faith.
Failing to conduct a prompt and complete investigation
Insurance companies must conduct prompt and complete investigations into all valid claims made by policyholders. If your insurance company does not properly investigate your claim, it may be acting in bad faith.
Offering less money than a claim is worth
Insurance companies often offer policyholders less money than their claims are worth. When an insurance company intentionally makes a “lowball” offer to a policyholder, it is acting in bad faith.
Delaying or denying decisions on claims or requests for approval for medical treatment
Insurance companies know that time is of the essence when it comes to approving requests for medical treatment. If your doctor has prescribed care that that he believes is reasonable and necessary to treat a medical condition, your insurance company has a duty act on that request within a reasonable amount of time. If your insurance company unreasonably delays or denies your claim, you may have a claim for bad faith.
Refusing to pay a valid claim
If you have submitted a valid claim to your insurance company, and it is refusing to pay or settle your claim, the insurance company may be acting in bad faith. An insurance policy is a contract, and if an insurance company fails to fulfill its obligations to the policyholder, it may be held liable for bad faith breach of the insurance contract.
Making threatening statements
An insurance company should never make threatening statements to a policyholder. If your insurance company has threatened you, contact a bad faith insurance lawyer right away.
Misrepresenting the law or policy language
If your insurance company has intentionally misrepresented the law or language in your insurance policy, and has denied a valid claim based on this misrepresentation, you may have a claim against your insurance company for bad faith. As part of the duty of good faith and fair dealing, insurance companies must be truthful in their statements about the law and your policy.
Putting insurance company profits over a policyholder’s valid claim
Insurance companies should never avoid paying a policyholder’s valid claim to bolster their own profits. Insurance company tactics including lowballing and improperly denying valid claims may constitute bad faith.
Delaying payment of a valid claim
Insurance companies should not unduly delay payment of valid claims. If your insurance company has failed to make a timely payment of your valid claim, you should consult with a bad faith insurance lawyer to discuss your rights.
Refusing reasonable requests for documentation
If you ask your insurance company for documentation in support of their decisions, the company must comply with your request. Your insurance company should never refuse to provide you with a copy of your policy or other coverage-related documents that it relied upon in denying your claim.
Disclaimer: Information provided on this site is NOT formal legal advice. It is generic legal information. Under no circumstances should the information on this site be relied upon when deciding the proper course of a legal action. Always get a formal case evaluation from a licensed attorney if you think you might have a personal injury lawsuit.