Everyone purchases insurance to protect themselves from unexpected events, whether it’s a car accident or a natural disaster. Insurance companies are legally obligated to act in “good faith” when dealing with policyholders and paying claims. Unfortunately, some insurance companies fail to meet this standard and engage in dishonest or unfair practices, known as “insurance bad faith.”
What is insurance bad faith?
Insurance bad faith refers to any deliberate or negligent act of an insurance company that involves dishonesty, fraudulence, deception, or breach of contract, which negatively impacts a policyholder. Examples of this can include:
- Denying a claim without reasonable justification.
- Delaying payment of a valid claim.
- Undervaluing or underpaying a claim.
- Failing to swiftly investigate a claim.
The Impact on Policyholders
Insurance bad faith can have severe consequences for policyholders, who may be left to bear the costs of injuries, property damages, and other losses if their claims are denied or delayed unjustly. In some cases, bad faith actions by insurers may even expose their policyholders to financial ruin far beyond the original costs incurred.
Red Flags to Watch Out For
Consumers should be aware of common red flags that could signal an insurance company is engaging in bad faith practices. These could include:
- Unequal treatment compared to other policyholders
- Lack of communication throughout the claims process
- Implementation of policies that create a conflict of interest
- Failure to properly investigate or evaluate the claimant’s position
- Refusal to explain coverage or adjuster decisions
Protecting Policyholders against Insurance Bad Faith
To ensure you are protected against insurance bad faith, it is critical to carefully review the policy before signing, make note of any confusing or conflicting clauses, and then ask for clarifications. Additionally, make sure to document everything that pertains to your policy, and never sign any documents without fully understanding their significance.
If you suspect you are already dealing with an insurance bad faith claim, document all conversations between you and the insurer. Obtain copies of relevant documents, such as insurance policies, correspondence, witness accounts, and medical records. Ultimately, you may need to contact a legal professional experienced in dealing with insurance bad faith cases to help you navigate the claims process.
Atlanta Insurance Bad Faith & Fraud Lawyers
At Goldstein Hayes & Lina, LLC, we specialize in insurance bad faith cases and have a proven track record of success. Contact us today at (888) 425-6070 to schedule a free consultation and learn more about how we can help you.