When you sign up for an insurance policy, you are taking steps to ensure that you are covered for any financial losses that might arise if disaster strikes. On the other hand, the insurance company promises to show up and provide the monetary support necessary to get you back on your feet. But what happens when disaster strikes and the insurance company decides to backtrack on its promise?
It is not uncommon for some insurance companies to attempt to engage in practices that amount to subversion of justice. This is known as insurance bad faith, and as you can imagine, it can be very frustrating. If you believe the insurance carrier is deliberately trying to deny you what is rightfully yours, you may consider pursuing a bad faith claim against them.
Understanding bad faith insurance
An insurance contract between the insurer and the insured is inherently based on good faith. In other words, both parties are required to engage in good faith while upholding their obligations under the contract. If the insurance company, for whatever reason, decides to deny a genuine claim, then they may be deemed to be acting in bad faith.
Here are two ways insurance carriers act in bad faith:
When they are unnecessarily delaying your claim – sometimes, the insurance company will pull all manner of tricks to delay paying an approved compensation. In so doing, the insurance company hopes to hold on to your money as long as possible so you can, out of frustration, give up.
When they are giving unreasonably low offers – sometimes, the insurance provider will give a lowball offer. The motivation here is usually to get you to accept a low offer out of desperation. Other times, the insurance company may offer a quick settlement without properly investigating your claim.
Safeguarding your rights
The insurance company has a legal duty to act fairly while handling your claim. In an event that they do not, you have a right to pursue a bad faith claim against the insurance company in question.