What Is Bad Faith Insurance?
Bad Faith Insurance Claims Can Happen to You
Many insurance companies are reputable businesses. Certainly, their company adjusters and the adjusters’ supervisors are honest people. Nevertheless, bad faith insurance claims are well-known in the insurance industry.
An insurance policy is an insurance contract between the insurance company and the insured person or business. As such, both parties to the contract are expected to act in good faith. This is referred to as a “covenant of good faith and fair dealing” in contract law.
Consequently, if the insurance company fails to abide by its duty of good faith, an insured may make a bad faith insurance claim against the insurance company.
Of course, we recognize that insurance companies are in the business to make money. Obviously, they are not simply in the business to give money away to their insureds. However, when insurance companies act in bad faith by not paying claims or delaying the processing of claims, they violate their duty of good faith to their insureds.
In short, insurance companies must not deny claims without a reasonable basis for doing so. Additionally, they must treat their insureds fairly.
If they do not do that, they may be guilty of bad faith dealing with their insureds. As a result, insureds can file bad faith insurance claims against the company.
How Do Insurance Companies Act in Bad Faith?
Indeed, there are several ways insurance companies act in bad faith regarding their insureds:
Refusal to Pay Out on a Valid Claim
When an insurance company refuses to pay out on a valid insurance claim, they have breached the contract with their insured.
A denied claim, without a reasonable basis for the denial, can result in a bad-faith lawsuit.
Delaying the Processing of a Claim
If the insurance company improperly delays the processing of a valid claim, the insured may file a bad faith insurance claim against the company.
For example, a company can delay the processing of a claim by not sending an adjuster to inspect the damaged property.
Likewise, the company could ask the insured to produce duplicative documents or ones that do not exist.
Similarly, the company could simply sit on the file, claiming it was reviewing all the records before completing the investigation.
Refusing to Pay the Insured a Fair Amount to Settle the Claim
Perhaps the insureds are an elderly couple who do not fully appreciate the amount of damages a storm caused to their home. Unfortunately, the insurance company adjuster made a cursory inspection. In spite of the obvious damages, the company has come back with a quick but low settlement offer. In this case, the offer does not fully compensate the couple for their losses.
However, they have never had to make a damage claim before. Therefore, they did not know they could negotiate with the adjuster.
Unfortunately, they accept the offer, to their detriment.
What Damages Can You Get in a Bad Faith Insurance Claim?
Notably, there are various types of damages an insured who makes a bad faith insurance claim can recover:
- · Statutory penalties and interest
- · Attorneys’ fees and court costs
- · Damages for emotional distress (just like in a personal injury suit)
- · Damages for economic losses
- · Punitive damages
As a matter of fact, a person or business who makes a successful bad faith insurance claim may recover monies over the policy limits.
If You Need a Public Adjuster for Property Damage Insurance Claim, Call AllCity Adjusting
To begin with, we are a family-owned claims company with five decades of combined adjusting experience. As a result, if there’s one thing we understand, it’s that you need 100% of your claim value.
Of course, you have already gone through a tumultuous event. For this reason, get an agency that gets you more.
At AllCity Adjusting we work to ensure you get 100% of your damage insurance claim value. Equally important, with over 50 years of combined adjusting experience, we know insurance companies and understand where they cut corners.
Moreover, we help you build a larger claim and get you back to normal fast. Don’t get fooled. Instead, get the company that gets you more.
Bad faith insurance claims happen. Therefore, if you have received a low-ball offer from the insurance company or you just want to talk to someone on your side, call us at 844.692.3587. You can also email us at info@allcityadhjusting.com.
