How to Detect Bad Faith Insurance: 5 Indicators for Policyholders to Know and Prove Bad Faith Insurance
In our previous article, we talked about what is bad faith insurance and how you can prove that the insurance lawyer or company is committing bad faith.
Today, we would talk about the ‘indicators’ that would signal you immediately that your lawyer or insurance company is handling the bad faith claim. Although it is hard to prove sometimes that they are not treating you well in terms of your insurance claims, these signals would help you be on guard as soon you detect any one of them.
Read on to know in detail how you can prove bad faith insurance.
How to Prove Bad Faith Insurance: 5 Major Indicators
Generally, insurance is the contract between the policyholder and the insurance company which is responsible for indemnifying the policyholder against any losses or damages to property. The losses are indemnified only if the policyholder pays a specific amount every year called a yearly premium.
This contract is breached as soon as the insurance lawyer or company stops providing that financial protection or reimbursement in the name of indemnification. However, there is a slight difference between a breach of contract and bad faith.
In a breach of contract, one party fails to fulfill the criteria or one of the clauses of the insurance contract. It could be either the policyholder or the insurance company. On the other hand, a bad faith claim is when only the insurance company or lawyer acts unethically and refuses to pay the reimbursement in one way or the other.
For this purpose, certain indicators would assist you in knowing how the insurance company or lawyer is acting deceptively. Below are the top five indicators that would help you prove bad faith insurance within no time.
Deliberately twisting or misrepresenting the policy clauses:
It is a clever way for bad faith insurance lawyers to play with your little knowledge. They would try to read your mind and make you feel uninformed so that they could twist the terms of your policy. They would try to give examples of the statute as they would deliberately misrepresent the insurance terms for their own advantage. The outcome would be either denial of your claim or an underpayment of the insurance coverage. Therefore, it is important to read all the clauses of the insurance once you enter into this contract. You must be well-informed of the terms and policies, for which, you might have to do some research on your end beforehand.
To further delay the process of giving you justice, they would ask for excessive documents that might not be relevant to your case. This is a classic tactic of bad faith insurance lawyers where they want to give you the impression that they are wholeheartedly working on your case whereas the reality is totally opposite. Also, they would ask for some information that you might feel is not pertinent to the case but still, you want to cooperate as you are thinking the insurance company or lawyer is helping you to get your claim. In the end, you might have to give the information that is really not needed. If you deny it, they might deny giving your claim.
This is the best form of bad faith claim handling that insurance companies or lawyers do. They do not pick up your calls and don’t even reply to your messages. They do not even bother calling you back even if they have seen your several missed calls and sent messages, from morning till night. In many states, it is completely illegal as insurance lawyers are accountable for keeping call records and being available in as much correspondence as possible.
Delaying the process of investigation or support in payment claim:
The bad faith lawyers delay the process of giving you justice on time. This is another common tactic for invalidating your claim for which they would give numerous reasons. For example, they would tell you that they were busy collecting some data, facts, or information related to the case. It would result in the delay of your rightfully claimed payment as the process would subtly become time-consuming. For instance, you experienced huge losses due to a house fire and are now regularly visiting your insurance company to help you with the reimbursement. The firm keeps denying the valid claims of the policy or keeps you waiting while they are collecting some ‘so-called’ evidence of the house fire and other details.
Underpayment of claim:
The bad faith lawyers try to trick you with extra charges that they show you they have made on your car repair, for example, if you have hired them for car accident insurance. They would state extra costs were incurred in the process, for which underpayment of your claim might be the result. It is either an underpayment or no payment of your claim when they try to make a settlement for a lower claim.
It would be hard for you to accept the low-offered claim because, after that, it would close the deal. Later, you cannot do anything, even if the offer does not include enough funds for the car repairs. To make the scenario clearer for you to understand, read this example: a motorcyclist gets injured in an accident and has to pay $5000 in medical bills. He has only $2000 in his bank account whereas the insurance company is putting forward unreasonable justifications to only pay $1000 for his medical bills.
Finally, recognizing bad faith claim handling is critical in guaranteeing the insurance industry’s fairness and openness. Insurance firms have a legal and ethical obligation to deal with their policyholders in good faith, and they should not engage in unfair or misleading techniques to deny genuine claims. Insurance firms can assist prevent fraud while also safeguarding policyholders’ rights by thoroughly researching the facts underlying a claim and looking for indicators of ill faith. A dedication to honesty, fairness, and ethical behavior is critical for developing confidence and safeguarding the insurance firm or lawyer’s credibility.