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How To Recognize When An Insurance Company Is Acting In Bad Faith

Wed Nov 30th, 2022 on     Bad Faith Insurance,    

When your insurance claim is denied, it is important to understand why. Sometimes, there is a valid reason why your carrier denies your claim. At other times, the denial is not appropriate and the insurance carrier is acting in bad faith. Bad faith denials are an area that our firm focuses on, and we hold accountable insurance carriers that wrongly deny valid policyholder claims. 

One of the most common questions asked by our clients is how to tell the difference between an appropriate denial and one that has been issued in bad faith. Below, a Miami bad faith insurance lawyer from our firm offers tips on recognizing when an insurance company is acting in bad faith. 

Failure to Provide a Valid, Understandable Reason

The insurance carrier is required to provide the reason why they have denied the claim. Failure to do so can indicate bad faith. Also, when the reason for denial is received, you should compare it to the terms of the policy itself to see if they align. If they do not, even though a reason was provided, the insurer may still be acting in bad faith. 

Poor Communication

A lack of communication from the insurance carrier can indicate bad faith. Poor communication can include:

  • Failure to return phone calls, emails, and written correspondence
  • Failure to acknowledge receipt of a communication
  • Failure to move forward with the investigation of your claim

Your insurance company should work with you and the exchange of information should be easy and prompt. When your insurance company is not cooperative, you need to speak with a Miami bad faith insurance lawyer.

Failure to Pay a Valid Claim

Even after the insurance company has acknowledged that a claim is valid, they may unreasonably delay paying the claim. Attempts by the insurance company to delay payment can be an indicator that they do not intend to pay the claim at all or are waiting for you to accept a lowball amount. The carrier often assumes that the longer you have to wait, the more likely you are to accept less than what your claim is worth. After all, your bills are piling up and you need the money. Remember, an insurance company is a business, and they want to make money. The less they pay for your claim, the healthier their bottom line. 

Denial Is Based On Reasons Not Found In Policy

You should be wary when your claim is denied for a reason not found in the language of the policy. Insurance companies sometimes say there was a verbal agreement in addition to the written policy and they are denying the claim based on that verbal agreement. Or they may not mention a verbal agreement but give a reason that is not found in the policy or in governing law. When this happens, it is a sign that they may be acting in bad faith, and it is time to speak with a Miami bad faith insurance lawyer

Failure to Properly Interpret the Policy

The insurance company may say that the denial is founded on verbiage found in the policy, but what they are claiming does not seem to match up with the actual language of the policy. When their interpretation of the policy seems off, it is a good indicator that they may be acting in bad faith. 

Another way this may happen is when an agent of the insurance company claims that the policy states something that it does not state when they are selling the policy. If this later causes a problem and you are unable to have a claim paid due to the misrepresentations of the agent of the insurance company, you may have a claim for bad faith.

Multiple Inspections of the Same Thing

When you make a claim, it is normal for the insurance company to send someone (an adjuster) to come and inspect the damage that you are making a claim for. However, it is not typical for them to send the same person, or even different people, to examine the same damage multiple times. When this happens, it is usually indicative that they are seeking a reason to deny your claim. This may be a sign of bad faith dealings.

Failure to Timely Investigate the Claim

Generally speaking, an insurance company typically has no more than 30 days to investigate a claim and issue a decision. Failing to act within this time frame can be indicative of bad faith, especially if the insurance company is unable to offer a valid reason for the delay. To find out the exact amount of time they have to investigate your claim, speak with a Miami bad faith insurance lawyer.

Pressure to Accept a Low Settlement

Insurance companies may pressure you to accept an amount lower than what your claim is worth. This is an especially nasty tactic as you may be in a dire financial situation due to the accident. The insurance company may tell you the low amount is all your claim is worth, or they may hope that you assume you have no bargaining power and have to accept the amount they offer. 

Failure to Investigate the Claim

Insurance companies are not allowed to push new claims to the back burner and ignore them. They must investigate the claim within a reasonable time frame and issue a decision. Failure to investigate what happened is often an indicator of bad faith. 

Failure to Provide & Information

The insurance company is obligated to comply with any reasonable requests you make for documentation and information related to your claim. When they don’t, it may be a tactic used to avoid providing you with information that will bolster your claim. At any rate, a failure to comply with your requests can be seen as bad faith.

Speak With A Miami Bad Faith Insurance Lawyer at Ver Ploeg & Marino

If your claim for coverage has been denied by your insurance carrier, and you believe they are acting in bad faith, contact our firm to speak with a Miami bad faith insurance lawyer. We are attorneys that focus our practice on assisting policyholders to obtain the compensation they deserve.

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