You carry insurance to help protect you financially after a catastrophe beyond your control. Your auto insurance, for example, should provide compensation after a serious auto accident, while your property insurance, whether homeowners or renters insurance, should offer vital protection if a fire or natural disaster damages your property.
Other people carry auto and homeowners insurance in case they injure you—a negligent driver who slams into you or a homeowner who fails to monitor a swimming pool where a child can get hurt.
Sometimes, however, insurance companies may try to get out of offering you the compensation you deserve.
You pay for your insurance faithfully. You made sure you have the coverage you need for a variety of circumstances. Then, you receive the notice: claim denied. Instead of paying out the compensation needed after a disaster, your insurance company refuses to help. You may wonder what on earth you can do next. How can you protect yourself?
Contact a bad faith insurance lawyer as soon after your incident as possible. Working with an attorney on a bad faith insurance claim can help you more effectively navigate those circumstances and pursue the results you really need.
What Counts as a Bad Faith Claim Denial?
Simply denying your claim does not automatically mean that the insurance company has acted in its best interests. When you take out an insurance policy, you enter into a contractual agreement with the insurance company. As long as you hold up your end of the bargain, usually by paying your premiums, the insurance company should issue payment for damages suffered within a reasonable time.
Most often, insurance policies contain several exceptions to their usual coverage, which may mean that you do not have coverage for every type of disaster or injury.
If, however, the insurance company does not uphold its end of the contract, including providing reasonable compensation to you following an event covered by the policy, you may have grounds for a bad faith claim.
Your insurance company needs to pay out for a specific incident, from water damage to damage to your roof following a nasty storm. Unfortunately, despite agreeing to issue that payment or clearly determining that your damage falls under the covered aspects of your policy, the insurance company may use a variety of tactics to promptly avoid paying out that claim.
Denying Payment Without Investigation
If you receive a claim denial out of hand, without any investigation into the circumstances that led to your claim or the type of damage you suffered, the insurance company may have acted in bad faith. The insurance company needs to look into the conditions that led to the damage, examine the damage itself, and issue prompt, reasonable payment related to that damage.
Unexpected Policy Cancellations
You did your best to fill out all the paperwork related to your insurance policy, but you may have missed some vital paperwork along the way, or failed to take care of signing a last document. Perhaps your paperwork contains an insignificant error somewhere in its depths, where you failed to note it before signing.
Unfortunately, in some cases, when you call in a claim, the insurance company may use those minor errors to cancel or void your policy. Often, life insurance companies will use this tactic to avoid paying out when someone dies, even if the covered party made all payments on time and took all necessary steps to take care of those details.
Issuing Less Compensation Than You Deserve
The insurance company might not deny your claim completely, but may try to avoid paying the full compensation you deserve for your losses. For example, if you suffered $20,000 worth of damage, the insurance company might agree to pay out a much smaller amount: just $10,000, just $5,000, or, in some cases, even less. This can leave you without the funds you need to make repairs or rebuild your life, which can substantially increase your overall frustration following a disaster.
Illegal Policy Exclusions
Most insurance policies contain some type of exclusion: types of damage that the insurance company does not have to pay for. For example, if you carry collision-only insurance on your car, the insurance company may not pay out for damage caused by a thief or falling limb. The company, however, must outline those exclusions in the policy and not twist the policy to make it seem as though the company does not have to pay.
4 Reasons You May Need a Bad Faith Insurance Attorney
You may need a bad faith insurance attorney for these four reasons.
1. An Attorney Can Review Your Claim and Your Policy and Let You Know How Much Compensation You Should Receive.
A bad faith insurance attorney knows how much compensation you should claim from the beginning of your lawsuit and can help you determine how much compensation the insurance company really owes you.
Often, insurance policies involve complicated language or contain numerous clauses that can make it incredibly difficult to determine how much coverage you actually have. Not only that, your insurance policy may contain multiple exceptions. For example, if you live in a flood-prone area, you may need to take out a specific flood insurance policy to have coverage in the event of a flood. Your insurance policy may not cover some types of water damage, or you might need to take out a specific rider to cover damage to expensive items in your property, including artwork and collectibles or jewelry over a certain price range.
If you need to claim substantial compensation after a disaster, you may find yourself unsure of how much compensation you are owed or even what you should claim. A bad faith insurance attorney can help you look over your policy and evaluate the damage to increase the odds that you will receive the compensation you deserve.
2. An Attorney Can Conduct the Investigation Your Insurance Company Should Have Conducted.
To determine how much compensation you deserve from any type of claim—from an auto accident or damage to your home to a personal injury claim—the insurance company will need to conduct an in-depth investigation. The insurance company may, for example, need to know the full extent of your injuries or damages, how many limitations those damages pose, and the value of those damages.
Furthermore, the insurance company may investigate how the damages occurred. What caused the damage? If you suffered damage to your property in a natural disaster, for example, the insurance company may clearly see how that damage occurred. On the other hand, if you have substantial flood damage, the insurance company may need to take a look at where the water came in, what steps you took to prevent it, and how cleanup efforts contributed to that damage.
Unfortunately, sometimes, the insurance company may deny a claim without ever really looking over the property. Suppose, for example, that your home suffers severe water damage due to a burst pipe around the same time your area sees heavy storms. Your insurance company may deny a claim for water damage even though you did not suffer any damage due to flooding. A deeper investigation will reveal the burst pipe as the source of the problem, but the insurance company might not take the time to seek that evidence.
An attorney, on the other hand, can take a look at that evidence, conduct an investigation, and help provide evidence of the compensation you really deserve.
3. A Bad Faith Insurance Attorney Can Help Show that You Plan to Take the Claim Seriously and Pursue the Compensation You Really Deserve.
Often, insurance companies assume that you, as the victim of a serious incident or accident, have no idea how much compensation you really deserve. That may mean that they issue a low settlement offer or that they deny your claim without really taking the time to look into it further. In some cases, it may even mean that the insurance company tries to prove that you caused an accident or event on your own: that you set a fire that took out your home, or that you deliberately caused an accident that resulted in serious injury.
Having a bad faith insurance attorney on your side shows that you plan to take the claim seriously. In some cases, the simple act of hiring an attorney can show the insurance company that you plan to take another look at the situation and that you will not simply accept its verdict in the claim.
4. A Bad Faith Insurance Attorney Can Negotiate on Your Behalf.
Your insurance company likely has a highly-qualified team of attorneys who have a great deal of experience fighting insurance claims. You need an attorney on your side who has equal experience with the court system and local laws involving insurance compensation. Having an attorney on your side can help decrease your stress and give you a better chance of receiving the compensation you really deserve for your losses.
Many people who have faced an insurance claim denial also find that having an attorney on their side helps decrease their overall stress levels. An attorney can take over dealing with the insurance company for you, which means that you will face less stress. You will not have to worry about accidentally saying the wrong thing or mistakenly minimizing the compensation you deserve from the insurance company. Instead, you can leave the claim in the hands of your attorney.
Your attorney will serve as one party that represents your best interests throughout the claim. The insurance adjuster represents the best interests of the company, which often include limiting the amount the company has to pay out as much as possible. Your attorney, on the other hand, will focus on ensuring that you have better odds of getting the compensation you deserve.
How to Sue an Insurance Company for Bad Faith
A bad faith claim denial can leave you with an equally bad taste in your mouth and a great deal of frustration directed straight to your insurance company. What should you do next?
Contact an Experienced Bad Faith Claim Attorney as Soon as Possible.
As soon as you receive that claim denial, especially in the case of a claim you assumed your insurance company (or, in the case of an accident resulting in severe injuries, the other party’s insurance company) would pay, get in touch with an experienced bad faith claim attorney.
An attorney can look over your policy and your claim and give you a better idea of the compensation you should expect from your insurance company. Not only that, an attorney can provide you with valuable information about your next steps, including what information you most need to proceed with your claim.
Document All Interactions with the Insurance Company.
Keep track of all interactions you have with the insurance company, including any contact you have with the adjuster, any questions they ask you, and information about your claim denial. Your documentation can show clear evidence of a bad faith claim, which may make it easier to prove that the insurance company denied your claim in bad faith, rather than denying your claim due to an error.
Ask for Information About Why the Insurance Company Denied Your Claim.
You should receive a written explanation of why the insurance company chose to deny your claim, including information that directly references exceptions contained in your policy. If recent changes have caused your claim denial, you should receive a clear explanation. If the insurance company will not respond, talk to your attorney about what further action you may need to take.
Did You Face a Bad Faith Insurance Claim Denial?
If you faced a bad faith insurance claim denial, an attorney can help give you a better idea of what to do next, including the compensation you should reasonably expect from the insurance company. Contact an experienced personal injury attorney today for a free consultation.