When you purchase insurance, you are doing so with the expectation that your provider will always uphold your best interests. Your provider is required to handle your claim with a ‘duty of good faith’ but if they break that duty, it is considered bad faith insurance.
There are many common misunderstandings about bad faith insurance and dispelling these can benefit both you and your provider. Keep reading to learn what to watch out for and how to react if your claim has been mishandled.
How do I know if my insurance provider is acting in bad faith?
Both first party insurance companies and third party insurance companies must hold themselves to the appropriate standards. First parties can only refuse to pay a claim if they have a reasonable basis and they must properly investigate the claim before making their decision. The latter party is responsible for settling claims within policy limits and doing so in a timely manner.
So what are some signs of bad faith? The following types of conduct should be a red flag:
· Acting deceptively
· Deliberately misrepresenting information
· Using abusive or coercive tactics
· Inadequately investigating claims
· Making unreasonable demands for proof of loss
· Failing to reveal policy limits
· Telling the insured to contribute to the settlement
Whether you’re covered by automobile insurance, homeowners insurance, or medical insurance, acting in bad faith appears similar across the board. Now that you know what to look for, here’s how to handle it.
Taking Action in Light of Bad Faith
The first and most crucial step in dealing with bad faith is hiring an attorney. Because you may be able to collect damages, your attorney can represent your rights and ensure that you don’t walk away with less than you deserve.
Together with your attorney, draft a letter to send to the insurance adjuster. Disclose any evidence of bad faith and ask for their reasoning behind these actions. If the adjuster fails to respond or take action to make it right, you may be able to file a written complaint with California’s state insurance board. Should all else fail, a lawsuit may become necessary.
Victims of bad faith insurance companies may be able to collect several different forms of damages. These include the amount of money you should have received in the first place, damages caused by the misconduct, and even attorney’s fees.
There is no time to delay if you believe your insurance company is acting in bad faith. Retain our Orange County personal injury lawyers today to learn how we can represent you and provide protection for the rights you deserve.