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6 Ways Insurers Act in Bad Faith

Fri Feb 12th, 2021 on     Bad Faith Insurance,    

Hire an Experienced Miami Bad Faith Insurance Attorney  

If you’ve submitted a claim for insurance benefits and have had those benefits denied, undervalued, or delayed (or have perhaps had the insurer refuse to step in and defend you against third-party litigation), then you may be entitled to challenge the insurer’s decision under Florida law.

In some cases, the insurer has violated its obligations to you — the policyholder — to such an extent that it qualifies as bad faith misconduct.  Bad faith claims can give rise to independent compensation, and even bonus punitive damages.  If you believe that your insurer has acted in bad faith, it’s worth exploring your legal options.

Here at Ver Ploeg & Marino, P.A., we encourage you to contact an experienced Miami bad faith insurance attorney at our firm to schedule a consultation.

For now, let’s explore some ways in which insurers act in bad faith.

Insurer Had No Reasonable Basis for Their Denial

Insurers may not be held liable for bad faith if they simply made a mistake.  As such, the mere fact that they “denied” your claim is not justification for a bad faith lawsuit.  Instead, you will have to show that they had no reasonable basis for denying your claim.

This can be a bit of a challenge.

For example, an insurer who denies your claim on the basis that you did not submit sufficient evidence may have reasonably denied it, even if your claim is legitimate — once you provide the additional evidence, however, if they deny it then they may not have a reasonable basis for doing so.

Whether the insurer denied your claim “reasonably” is a fact-based question that will be evaluated by the court.

Insurer Unreasonably Delayed Processing of Claim

Insurers must not unreasonably delay the processing of your claim (or subsequent communications regarding your claim).  If you submit a question regarding required documentation/records to your insurer and they do not provide a prompt reply (for example, they delay sending a response for three months), then that could very well constitute a bad faith act justifying a lawsuit.

In many insurance contracts, there are specific provisions holding the insurer to certain deadlines for claim processing.  It’s important to go over these provisions with your attorney so that you can hold the insurer to their own contract terms.

Insurance Agent Misrepresented Contract Terms

If the insurance agent misrepresented the terms (i.e., specific terms, policy limits, exclusions, etc.) when you entered into the contract, then you will have an actionable bad faith claim against the insurer.  Insurers must not misrepresent the contract so as to induce you into signing onto the policy.

For example, suppose that you sign onto a homeowners’ insurance policy in which flooding is excluded from coverage.  When you were discussing exclusions with the insurance agent, however, they told you that flooding is not excluded from coverage.  This misrepresentation would qualify as a bad faith act.

Insurer Refused to Defend Despite Clear Coverage

Depending on the insurance coverage, your insurer may have a duty to defend you in related litigation.  A liability insurer, for example, may have to step in to defend your business if a customer sues the business in a personal injury lawsuit.

Unfortunately, many insurers will attempt to avoid their responsibilities under the insurance contract and avoid defending you in litigation.  Though in some cases there may be legitimate ambiguity in the insurance contract (concerning coverage), in cases where the contract is unambiguous as to its terms, the insurer’s refusal to step in and defend you in litigation could lead to a bad faith claim.

Insurer Did Not Fully Investigate Claim

Insurers must fully investigate claims.  They must engage the resources necessary (human, technological, etc.) to do so.

For example, if you’re being sued by a third-party and your liability insurer fails to fully investigate the claim, this could expose you to significant potential liability and extend litigation unnecessarily — under such circumstances, a bad faith claim against your insurer may be justified.

Insurer Failed to Notify Policyholder of Required Information

Insurers have a duty to notify policyholders of required information, records, and data that they will need to fully process the claim at-issue.  Failure to notify policyholders of the required information could be construed as bad faith — particularly as it tends to create confusion and lead to a policyholder’s legitimate claims being left unaddressed by the insurer.

Insurers have an incentive to avoid disclosing this information to policyholders, so it’s important to evaluate whether your insurer has disclosed everything that you’ll need.  If your claim has been denied on the basis of you having minimal supportive evidence, but the insurer did not notify you as to what they would have required to fully investigate and process your claim, then they could ostensibly have acted in bad faith.

Contact a Miami Bad Faith Insurance Attorney at Ver Ploeg & Marino, P.A. for Legal Assistance

Ver Ploeg & Marino, P.A. is an insurance litigation firm based out of Miami, FL, with decades of experience representing policyholders in a wide range of insurance disputes.  We help policyholders navigate the challenges of securing compensation in a complicated insurance scenario — and, where an insurer has engaged in misconduct (or otherwise unjustified behavior), are committed to pursuing bad faith claims on behalf of our clients.

Effective advocacy requires trial readiness.

We have a deep bench of litigators who are willing and able to push through to trial — this gives us leverage in negotiating a resolution with insurers at an early stage of litigation.  Oftentimes, we can use this leverage to secure a favorable resolution and avoid a lengthy dispute.

If you’d like to speak to an experienced Miami bad faith insurance attorney at VPM, we encourage you to contact us to schedule a consultation at your earliest convenience.  We look forward to speaking with you.

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