Bad Faith Insurance: What You Need to Know
We buy car insurance to protect us in the event of an accident. We expect that when a crash does occur, we’ll be able to file a claim and get it resolved quickly.
This does not always happen, though. Some insurance companies will engage in behavior known as bad faith insurance. This occurs when an insurer reneges on its obligations to clients. If your insurance company refuses to compensate you for your car accident even though you have full coverage, this is considered bad faith and it is illegal.
Bad faith insurance is common because insurance companies are not looking out for consumers. They are worrying about themselves. When an insurance company delays or denies a valid claim, this is considered bad faith insurance because it is a breach of contract. A simple mistake that is later remedied is not bad faith. Bad faith needs to be intentional. Here’s a look at some examples of bad faith insurance.
Denying a Claim Without Reason
If the insurance company denies a claim, they must have a valid reason. They cannot simply deny a claim because they felt like it and didn’t want to pay the client. An invalid reason or no reason at all is considered bad faith.
Intentionally Delaying a Claim
Sometimes it takes time to investigate a claim and make a decision. However, if the insurance company is intentionally finding ways to delay your claim, and the reasons are not valid, then this could be bad faith.
Improper Investigation
The insurance company must thoroughly investigate your accident claim. If they fail to do so and subsequently deny your claim, then it is considered bad faith.
Making a Lowball Offer
Your insurance company should pay you what your claim is worth. For example, if you spent $5,000 on medical expenses, then you should be compensated for that amount. The insurer should not be trying to settle your case for $1,000.
Misrepresentation of the Policy
An insurance company cannot misrepresent the law or language in your insurance policy. They must be truthful to clients. If they intentionally deny a valid claim based on this misrepresentation, you may have a claim for bad faith.
Making Threats
The insurance company representatives should be respectful to you. They should not be making fraudulent claims against you, such as accusing you of a crime. If they are calling you names or threatening you, get a lawyer right away.
Contact a Personal Injury Lawyer
Even if you have adequate insurance coverage, your insurer may try to deny or delay your accident claim. This is an example of bad faith and it is illegal.
If your insurance company is acting in bad faith after an auto crash, seek legal help from a Houston car accident attorney from The West Law Office, PLLC. We can help resolve your claim so you get the compensation you deserve. Schedule a free consultation by filling out the online form or calling 281-347-3247.
Source:
investopedia.com/terms/b/bad-faith-insurance.asp
