Are You Involved in a Bad Faith Dispute? Tips on How to Win
People work hard for what they have, resulting in the need to protect their belongings, property and even life. Luckily, they are able to do this by purchasing insurance on their most valuable possessions.
Insurance policies ensure that if anything detrimental occurs and a person ends up facing financial losses, they’re able to keep their head above water and replace what they lost. Sadly, insurance companies don’t always make this easy, and in some instances, their practices fall under “insurance bad faith.”
What is Insurance Bad Faith?
Any insurer in America has a duty of “good faith” to their policyholders. This means that if a policyholder has a legitimate insurance claim, it is the duty of the insurer to provide the compensation that they deserve.
Regrettably, insurance companies don’t always do this. There are times when insurers will purposefully prevent their policyholders from recovering the compensation that they may desperately need.
Bad faith insurance practices are illegal in America. A policyholder who can prove that they’ve been treated in bad faith can recover financial compensation exceeding what they would’ve had the insurer approved their claim in the first place.
In 2009, for instance, a property owner sued Liberty Mutual for bad faith practices. The company failed to defend their case against a policyholder in court, and this led to a $3.4 million judgment for that individual.
Logic Behind Bad Faith Practices
Bad faith practices are driven by what many illegal behaviors in America are driven by, financial gain. Insurance companies, regardless of how necessary they are, are privately owned companies.
This means that it is their goal to turn a profit. Every time they have to pay out an insurance claim, this detracts from the profits they make. Unfairly preventing a policyholder from getting what they deserve increases their profits.
Insurance companies may engage in a multitude of behaviors that constitute bad faith practices. Listed are a few of the most common practices aimed at policyholders.
- Low-balling – Adjusters are known for offering a settlement that is excessively low in hopes the claimant will accept the settlement.
- Denials - The simplest forms of bad faith are denying a legitimate claim. Nearly every claim is denied the first time.
- Delays -Additionally, insurers may purposefully delay payment by failing to acknowledge their policyholder. Some insurance adjusters will even try to make recovery difficult by refraining from telling their policyholder whether or not a certain incident is covered.Fighting Back
Luckily, there are ways to fight and win against insurers who are engaging in bad faith practices. They are as follows:
- Recognize the Signs – The most important first step is to recognize that bad faith is occurring. If it seems that an insurer is engaged in any of the aforementioned tactics, or any seemingly deceiving behavior, it’s important to speak with an attorney.
- Get Representation – An individual can bring forward a bad faith claim on their own, but since insurance companies are extremely adept at handling issues at court, this could be a huge mistake.
- Keep Track - An insurance policyholder can help their attorney by making notes of all contact with the insurance company and keeping any denial letters or other correspondence from the company.
- Organize - It’s also imperative to keep track of all medical bills, regardless of whether they’re paid or not, and financial burdens that are created by the initial incident that led to the claim and the unfair denial. This will help a legal professional secure the highest compensation possible.
Bad faith practices are unacceptable, and when an insurance company engages in them, they can cause serious harm to a policyholder. This is why, in many cases, policyholders are able to recover substantial judgments in court when they’re unfairly treated in this way.
It’s important, however, for an individual to find legal help when faced with these practices. This is often the only way to ensure fair compensation after the fact.
Jamica Bell is a freelance writer and blogger. She contributes this article as a way to shed light on bad faith disputes that make it challenging for policyholders. During her research, she found helpful information on the website of trial lawyers Doyle and Raizner, http://www.doyleraizner.com/workers-compensation-bad-faith-disputes-with-liberty-mutual. They are dedicated to helping victims of bad faith case find peace of mind.
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