Bad Faith Insurance Settlements Examples
You've filed an insurance claim to get compensated for the damages you suffered from a car accident. You've always made regular payments of your auto insurance premium. However, your insurance company refuses to pay you without telling you why. And now, it refuses to respond to your demands. What should you do? Many states will allow you to file a bad faith insurance settlement claim against the insurance company. Read on to learn about the indicators of bad faith insurance settlement practices.
Bad Faith Insurance Settlements: The Basics
Insurance is a form of contract in which payments of premiums are exchanged for an insurance company's promise to compensate for legitimate claims. An insurance company has a contractual duty to act in good faith, which is implied in the relationship between the insured and the insurer.
When you file an insurance claim, the insurance company must fulfill its duties by investigating your claim, making a fair deal, and providing reasonable services. If it fails to fulfill its duties as stated in the policy language and by law, you may file a lawsuit for bad faith insurance settlement practice. Specific insurance laws and requirements may vary by state and by insurance companies. Thus, be sure to check your insurance policy language to check if it failed to keep the promises made.
Examples of Bad Faith Insurance Settlements
There are several ways an insurance company can be held liable for bad faith insurance settlements and denials. Some bad faith insurance settlement examples are when an insurance company:
- Fails to inform the insured of pertinent information
- Fails to perform proper investigation of the claim
- Denies the claim without investigating the claim
- Fails to accept or deny the coverage claim within a reasonable period of time
- Offers an unreasonable settlement when liability and coverage are clear
- Offers a substantially less money for compensation than the actual value of the claim
- Fails to provide explanation or proper reasons for denying a claim
- Fails to respond to a request
- Attempts to settle a claim based on a policy that was altered without giving notice to the insured
- Alters a record of the insurance claim
- Requests unnecessarily burdensome demands
- Uses illegal or fraudulent methods of investigation
- Suggests you to hire a lawyer
If any of the above situations applies to your case, you probably have a valid claim to sue the insurance company for its bad faith insurance settlement practice. Before filing a lawsuit, write a letter claiming bad faith to the insurance company. It may draw the company's immediate attention, and the company may attempt to resolve the issue. However, if the insurance company fails to fix its bad faith insurance practice, you should consider suing the company.
Get Legal Advice by an Experienced Attorney
If you believe your insurance company has used bad faith insurance settlement practices, you may have a legal claim. Bad faith insurance settlement claims usually require specialized knowledge of that particular area of law. If you're thinking about filing a legal claim against the insurance company, you should consult with an experienced bad faith insurance attorney to explore your legal options and recover additional damages.