If you were injured in an accident, you reasonably expect to be able to file an insurance claim for the losses you suffered. People purchase insurance so that they are covered in case something happens, such as a car accident.
When an insurer does not deal with you in a reasonable and fair manner, this can cause your claim to be denied, its value reduced, or you left unprotected by claims from third parties.
In some situations, an insurance company may be found to have acted in bad faith. This can subject them to additional penalties, as well as having to cover the losses they initially denied.
However, establishing bad faith can be difficult, especially when insurance companies are protected by legal teams paid to protect their interests. Understanding bad faith and working with your own lawyer can help you balance the scales.
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What Is Insurance Bad Faith?
Insurance bad faith occurs when an insurance company deliberately violates its contractual obligation to a policyholder. In California, a host of insurance actions may be prohibited as unfair or deceptive acts or practices.
Specifically, such acts involved in the settlement process include:
- Misrepresenting material facts or policy provisions relating to coverage
- Misleading a claimant about the deadline to file a claim or lawsuit
- Failing to respond or act promptly regarding claims
- Lacking reasonable standards to promptly investigate and process claims
- Failing to promptly provide justification for the denial of a claim
- Failing to approve or deny claims after a reasonable amount of time after receiving adequate proof of loss
- Unreasonably denying policy benefits
- Failing to attempt to settle a claim or part of a claim promptly when liability has become reasonably clear
- Attempting to settle a claim for an unreasonable amount compared to settlement offers made in writing or in printed advertising materials that were provided when the claimant applied for insurance
- Attempting to settle a claim with an altered application
- Telling a claimant not to hire an attorney
- Requiring the policyholder to litigate a claim by refusing to make an adequate settlement offer
- Threatening to appeal an arbitration award for the sole purpose of getting the claimant to accept a lower settlement
These are simply examples of potential bad faith behavior. An insurance company or its agents can act in bad faith in many ways. Bad faith can arise any time the insurance company fails to act in good faith or does not use fair claims practices.
Questionable Insurance Tactics
In some other situations, insurance adjusters may engage in other questionable tactics. Depending on the circumstances, these may or may not constitute bad faith.
Examples might include:
- Insisting on a recorded statement
- Asking you about your injuries almost immediately after you make the claim when you may not know their full extent
- Instructing you that you don’t need to hire a lawyer or that they will just take part of the settlement you can receive without their help
- Asking leading questions
- Sending you blanket medical release forms to obtain information not relevant to your claim but to conduct a fishing expedition to find any other incident to blame your injuries on
- Asking trick questions
- Using false pretenses to obtain access to your social media accounts
- Getting you to make innocent statements like “I’m fine” to later use against you
It’s critical to keep in mind that insurance adjusters work for insurance companies. Their sole job is to protect the insurance company’s bottom line. You need someone on your side who will protect your rights just as zealously.
What Are Some Valid Reasons To Deny or Delay an Insurance Claim?
Insurance companies do not have to approve your claim or give you the exact amount of money you’re demanding just because you make the demand.
There may be legitimate reasons to deny, minimize, or delay your claim, such as:
- You did not have insurance coverage at the time of the accident.
- You were partially responsible for the accident. This can cause your award to be reduced by your degree of fault.
- You intentionally caused the collision or loss.
- You failed to take legal action within the applicable statute of limitations.
- You do not provide proof of loss, as requested.
These are just a few examples of justifiable reasons for denials, delays, or reductions in claim values. A knowledgeable personal injury lawyer can work with you to ensure your claim is timely filed and includes all necessary information.
Potential Remedies For Bad Faith Insurance Tactics
If you can prove that the insurance company engaged in bad faith actions, you may be able to recover compensation for the following:
- The benefits due under the policy
- Consequential economic losses
- Attorney’s fees and costs of litigation
- Emotional distress
Bad faith claims are difficult to prove and rely on compelling legal arguments based on the insurance contract between the company and the policyholder. An experienced personal injury lawyer can help explain your legal rights and options if you feel the insurance company is engaging in bad faith practices. Call (619) 777-5555 to schedule a free initial consultation with an attorney at Mission Personal Injury Lawyers.