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Insurance is unavoidable. It is something each and every one of us will probably have to deal with in some way and at some point in our lives. An insurance claim, policy limits, insurance policy, settlement offer, attorneys’ fees, claims adjuster, denying a claim, personal injury… these are just some of the terms we may come across. And though would naturally assume that the world of law is totally trustworthy, it doesn’t always work that way. Even the insurance industry itself is known for having its “rogue traders.” Not everybody within the industry follows all of the laws and treats people with the respect they deserve to ensure the duty of good faith. There are many examples of insurance companies trying to get away with not treating their policyholders in good faith. In fact, it’s quite the opposite, as some are acting in “bad faith.”
Bad faith is not always an exact science. It can be open to a little interpretation. In spite of this, you are protected by law as a consumer, especially when dealing with insurers and settlement—not every attorney-client relationship goes swimmingly when trying to settle a claim with your insurance provider, after all. Government regulations, Californian law and, in fact, federal law mean that insurance providers have to act in good faith at all times. If they fail to do so, the option is there for a consumer to sue the insurer for breach of contract.
Just as acting in bad faith can be a difficult thing to prove, it can also be a difficult thing to spot. It can be easy to get frustrated with a cost or a decision made by an insurer, but that doesn’t necessarily mean they have been doing anything wrong. So, how can you spot if your insurer is acting in bad faith? What are the telltale signs? We explore some of them below.
There are all sorts of reasons an insurance company would try and stall when dealing with a claim. Under their obligation to act in good faith, an insurer needs to act with integrity and respond to claims and even queries in a prompt manner. If you find that your insurance company is dodging calls, not getting back to emails or otherwise not communicating with you, then it could be a sign that they are acting in bad faith.
Some insurers do this to try and get out of paying, whereas others will do it because of cash flow. The longer they can keep hold of money, the better as far as they will be concerned. While it is in their account it can be making them money on premiums.
This is a telltale sign, and one that often sees people in San Diego and other parts of California end up in court. If you make a claim, an insurance company will often take a reasonable (but not excessive) amount of time to consider this claim and how much they will need to pay out before making an offer. These offers are negotiable.
If you have made a claim and an insurer can see that they will have to pay out a considerable sum in the future, they may try and bully you with an early offer which is less than the claim is actually worth, in the hope that you will agree without realizing that your claim may have paid out more.
Another technique seen time and time again is when insurers try to make it seem like you are actually the one delaying the claim. This may come in the form of requesting unrealistically obscure documentation. It could be them sending you on a proverbial goose chase of filling out unnecessary documents or reading through endless literature.
If you find that your insurer keeps asking these kinds of things of you, and it doesn’t feel like it is justified, you may well have a case against them. Of course, there are some documents you must fill in and certain procedures to follow, but if an insurer starts asking to see your electricity bill from 2013, it is time to call their bluff.
Though many insurance companies are reputable and will make no effort to get out of the payment they are legally bound to, some are a little less genuine.
Once a claim has been made, an insurer may panic and look into ways that they can find a loophole and, therefore, not have to pay. Expect them to go through everything they can inside the policy to see if there are inaccuracies or anything that can void the policy. It has been known for insurers to alter the policy to try and claim they are not obliged to pay out on a claim.
If you are making a claim and then the insurer starts fact-checking the information you provided when taking out your policy, it could be that they are looking for inaccuracies to try and trip you up.
Another common malpractice. If you receive an offer for significantly less than you are expecting, then it could be worth checking things with a lawyer. Insurers are often seen as experts and, therefore, trusted to make a fair offer. If you don’t know a lot about how insurance policies work then it can be easy to assume that this is the case. Some people aren’t even aware that the figures are up for negotiation!
There are many cases of insurance companies offering these low offers to take advantage of people who are desperate for the money or who are simply not aware they are getting scammed. You don’t have to take an offer, and going to a lawyer can ensure you at least get a second opinion o fair evaluation of what the claim is worth.
It seems that, as long as the insurance industry is a part of everyday life, there will be companies out there trying to get out of their obligations. When it comes to parting with money, you may have a fight on your hands. Choosing a reputable insurer is one thing, but ultimately, you shouldn’t have to make decisions based on these concerns. There are actions you can take. If you feel your insurance provider has acted in bad faith, contact Walker Law today to receive a free 15 minute consultation.