People carry all types of insurance for injuries, property damage, and more. Whether you file a claim for a car crash, damage to your home, or for your business, you deserve to be treated fairly by your insurance provider. Paying monthly premiums should ensure that you can recover benefits when you file a claim.
Unfortunately, insurance companies are businesses and notorious for preserving their bottom line, even if it means protecting their profits at the expense of their policyholders. They often use questionable tactics and push moral boundaries to avoid paying out claims. Insurance companies that cross the line are guilty of acting in bad faith, but they do not want you to know about bad faith claims and your rights as a policyholder or claimant.
Below, we discuss five things insurance companies don’t want you to know about bad faith claims, so you can be prepared if they treat you unfairly and make it difficult to recover compensation when you need it most.
1. Insurance Companies Have a Legal Obligation to Act in Good Faith
Each state has laws that force insurance companies to handle claims in good faith. Insurance carriers must review claims and respond to claimants in a timely fashion. They must also negotiate settlements honestly and make a strong effort to resolve claims. Insurance companies who intentionally mishandle insurance claims with unfair practices or fraud are breaking the law.
An insurance provider’s obligation to act in good faith carries various responsibilities and actions towards the policyholder. They do not want you to know they have a legal duty to act a certain way because they can avoid some or all financial liability for a claim more easily when they do not play by the rules. Examples of bad faith actions that some insurance providers commit include:
- Taking too long to respond to a claim
- Taking too long to investigate a claim
- Treating claimants unfairly in their decision
- Improperly interpreting a policy
- Offering unreasonable and unfair settlements
When insurance companies engage in any of the above behavior, it’s likely that the policyholder and/or claimant has grounds for a personal injury lawsuit against the insurance company.
2. Your Insurance Provider Is Not Working for You
You pay at least several hundred dollars per year in insurance premiums. However, many people spend thousands because they pay for insurance for their vehicles, boats, ATVs, businesses, homes, and more. You would think that paying your premiums would mean your insurance provider will act in your best interest and pay out claims without much of a fight. Additionally, large insurance companies spend millions on print, television, and radio advertisements to market their friendly, neighborly ways, leading people to believe their provider is truly on their side. Nothing could be further from the truth.
Insurance carriers want to avoid paying out large claims and when they can get away with it and completely deny claims when possible, even if their policyholder has never filed a claim before and always pays their premiums on time. Bad faith actions are driven by insurance providers’ heavy focus on protecting their profits. They don’t want you to know they value their bottom line more than they value your business. You NEED insurance, and in many cases, the law requires it. They can pretend they are working for you without following through.
3. Limited-Time Offers Are Fake
Insurance companies like to make predatory settlement offers to avoid paying out large claims. In the wake of injuries and/or property damage, some claimants are desperate for money. If they are injured, they might not be able to work, and medical bills are piling up. In other cases, they might need money to help them pay for temporary housing. Insurance providers make quick settlement offers soon after injury, especially in personal injury claims when the claimant is not the policyholder.
They want to attract people who are suffering economically to “take the money and run.” These offers are often far lower than the value of the claim, and they put pressure on people to take them by claiming they are the “best offer” or the “final offer.” The average person doesn’t realize that this is only a strategy to pressure someone into taking the settlement, so the company doesn’t have to pay a larger amount later on. If an insurance company refuses to pay you fair compensation for your claim, you can take them to court to seek a higher amount.
4. You Can Sue an Insurance Provider for Bad Faith
Most people know that if they sue someone after an injury, one or more insurance companies could be involved in the lawsuit. However, many do not know that if an insurance company acts in bad faith, they have the right to file a lawsuit against the company and seek compensation for damages related to the mishandling of their claim.
If you choose to bring a bad faith lawsuit against an insurance company, you could receive the full amount of the original claim plus interest. Additionally, courts sometimes award extra money to plaintiffs to punish the insurance company if they acted fraudulently. This additional compensation is referred to as punitive damages.
5. You Have the Right to Legal Counsel During Settlement Negotiations
Finally, insurance companies do not want claimants to know they have the right to hire a lawyer to handle settlement negotiations. They hope that claimants do not get legal counsel, eventually get frustrated, and give up their claim or accept an exceptionally low offer. Attorneys understand the tricky tactics insurance companies use and know how to protect their clients. Additionally, lawyers are trained negotiators who typically get better results than their clients would get without legal counsel.
At Perkins Asbill, our team of skilled insurance bad faith lawyers has ample experience helping clients get the compensation they deserve for their insurance claims. Contact us today online or call 916-446-2000 to learn more about how we can help.