Insurance companies do not always have their policyholders' best interests in mind. This can come as a shock to many people, particularly when the time has come to file an insurance claim, only to have their insurance provider deny it for no apparent reason. The truth is that many insurance companies protect their own profits over the wellbeing of their policyholders.
When an insurance company denies an otherwise valid insurance claim, it is said to be acting in bad faith. Bad faith insurance tactics can sometimes be considered illegal, and are always unethical. If you have recently had an insurance claim denied, it may be an example of bad faith insurance tactics at work.
What are some bad faith insurance tactics?
- Unreasonable delays
Insurance claims are often bogged down with red tape, but that is no reason for an insurance provider to drag your claim out unreasonably. Your insurance company has a responsibility to process your claim within a reasonable amount of time. It is an example of bad faith for a company to drag out the time for assessing a claim.
- An incomplete investigation
When you submit an insurance claim, your provider should investigate it thoroughly. However, insurance companies will sometimes do a shoddy, slapdash job. As a result, they may determine that your damages are much less than what they actually are. In a few rare, egregious instances, insurance companies have even willfully mishandled investigations in order to achieve the results that they wanted, rather than the results that their customer needed.
- Lowball settlements
There are often legitimate grounds for an insurance company to offer less money than you believe your claim is worth. Perhaps their investigation simply found that your damages were worth less than you believed. In other instances, however, an insurance company may be engaging in bad faith by offering you a lowball settlement. If you believe that your payment offer is not fair, there are ways to contest it. One option is to contest their decision and continue negotiating with your provider. However, this is not likely to work in your favor. It may be necessary to hire an insurance attorney to pursue litigation.