| Denied - Underpayment - Harassment | | | | denied, your ability to sue that insurance company |
| The story is a common one. A house catches fire | | | | may be limited. The laws in this area are in a state of |
| and the insurance company refuses to pay the claim | | | | constant change so do not assume you cannot sue. |
| or offers payment of less than 40% of the cost to | | | | Talk to an attorney first. |
| repair the damage. The policyholder tells the company | | | | How does it work? |
| about the new flat screen TV in the family room but | | | | Insurance companies employ entire departments of |
| she no longer has her receipt...since it burned in the | | | | people called actuaries. One definition of an insurance |
| fire. Does she wait to repair the damage while | | | | actuarial is "An Actuary is responsible for analyzing |
| fighting with the insurance company or does she give | | | | the possible outcomes of the types of events that |
| in and agree to sign a settlement for a lower value | | | | could potentially cause policyholders to make claims |
| just so she can move on with her life? | | | | against their insurance policies." That about says it all. |
| Our need to resolve losses and move on with our | | | | It is the job of actuarials to also weigh the likelihood |
| lives equals big profits at insurance companies. | | | | litigation will take place in the case of a loss, the |
| What do you do when you insurance company | | | | likelihood a policyholder will seek and obtain |
| refuses to pay or delays paying a claim...be it auto, | | | | competent legal counsel, pursue a claim, etc. This is |
| home, business or an accident involving your | | | | referred to as "risk management," and while these |
| property? | | | | people do not make decisions regarding claims, they |
| The same question applies when an insurance | | | | do provide the decision makers in insurance |
| company pays only a portion of a claim or | | | | companies with the "odds." |
| deliberately undervalues a claim. | | | | On the face of it, forcing a policyholder to pursue |
| When unnecessary delays, undervaluing of claims | | | | litigation can make sound economic sense. If the claim |
| occurs deliberately or a policyholder is rushed to | | | | is $50,000, the policyholder is going to have to spend |
| settlement of a claim, it is called "bad faith." | | | | a great deal of time getting their money. So, the |
| In all states, an insurance company is obliged to act | | | | claim gets lost, delayed, is undervalued all in a ruse to |
| with the best interest of the client or policyholder. It | | | | frustrate the policyholder and drive them to agree to |
| does not matter whether you live in Texas or Maine. | | | | settle for an amount much less than the actual value. |
| The legal obligations of an insurance company remain | | | | It works all too often. |
| the same. The laws governing specifically when and | | | | Payment of claims, however, is by no means an easy |
| how such matters are resolved in the courts can | | | | business. Insurance policies are complex and few |
| vary from state to state. However, the basic tenet | | | | policyholders carefully review their policies to assess |
| governing how an insurance company must operate | | | | the exclusions, omissions, etc. prior to filing a claim. |
| remains static. | | | | On the other hand, lawsuits have proven that ssome |
| When an insurance company fails to act in a fair and | | | | of the nation's biggest insurance companies have |
| honest way toward its policyholders or is dishonest in | | | | denied valid claims in an attempt to boost their |
| any way, "bad faith" is said to have occurred. | | | | bottom lines. These companies have even rewarded |
| Situations in which bad faith can occur vary widely, | | | | employees who would not pay claims, and when all |
| including auto insurance, life insurance, disability | | | | else failed, engaged in outright fraud to avoid paying |
| insurance, homeowners insurance, medical malpractice | | | | claims. |
| insurance, etc. | | | | Stall. Delay. Fill out more forms. Wait them out!!! |
| Examples of insurance bad faith include but are not | | | | Legal case histories are full of insurance companies |
| limited to: | | | | routinely delaying claims, knowing full well that many |
| Delaying payment of claims for an unreasonable | | | | policyholders will simply give up. Some have gone as |
| length of time | | | | far as to lock paperwork away in safes. Undoubtedly, |
| Denying coverage | | | | the most shameful use of delay tactics has been by |
| Denying payment on claims | | | | long-term care insurers, who often take advantage |
| Failure to investigate a claim in a reasonable manner | | | | of their policyholders' age and ill health. |
| Withholding benefits without cause | | | | In the words of one regulator, "the bottom line is |
| Underpayment of claims | | | | that insurance companies make money when they |
| Undervaluing claims | | | | don't pay claims . . . They'll do anything to avoid |
| Unfairly refusing to settle or reimburse claims | | | | paying, because if they wait long enough, they know |
| Abusive behavior toward policyholders or | | | | the policyholders will die." |
| unreasonable claims processes | | | | Get Qualified Help! |
| Cancellation of insurance policy unjustly | | | | If you or someone you know is battling with an |
| Anyone can bring a civil action against an insurance | | | | insurance company over a claim, the best course of |
| company when the individual suffers damage due to | | | | action is to find an attorney in your area with trial |
| an insurance company's behavior. Such claims can be | | | | experience in insurance bad faith. This specialty is |
| brought against companies for auto, home, business, | | | | unlike all others. It is critical that you ask how many |
| professional liability, health, life, disability, and other | | | | actual insurance bad faith trials the attorney has |
| types of insurance. | | | | participated in to assess their experience level. If the |
| Health insurance can be a little tricky in that employer | | | | number is low, keep looking. |
| provided insurance is limited by Federal laws known | | | | It is easy to claim experience and another thing |
| as ERISA, the Employment Retirement Income | | | | entirely to have built a career fighting insurance bad |
| Security Act. In other words, if you get your health | | | | faith. |
| insurance through your employer and a claim is | | | | |