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Insurance companies acting in bad faith: What should I know?

When you bought your first vehicle, you also purchased insurance to cover what might happen in an accident – hopefully enough to cover any damage your vehicle sustained and any injuries you or someone else suffered. When the day comes that you actually are involved in a crash, you quickly learn how good your insurance is and, for some, if your insurance company is acting in bad faith.

Insurance companies have standards they must meet. They must investigate and settle claims in good faith and can’t act in bad faith – in other words, use dishonest and unfair practices.

Some of the most common ways insurance companies act in bad faith include the following:

1. Forcing the policy holder to experience unreasonable delays.

This often includes an insurance company delaying the investigation in a car accident or a homeowner’s insurance claim to try to avoid settling a claim. The company may push off the investigation multiple times, hoping the policy holder just pays to fix any damages themselves.

2. Refusing to pay a valid claim.

One example might be if you purposely bought a health insurance policy that covered pregnancy. Now, three months after purchasing that policy, you are pregnant and the company doesn’t want to pay for prenatal care, claiming you were pregnant before your coverage began.

3. Offering the policy holder far less than the claim is worth.

An example of this is when a homeowner makes a claim after a bad hailstorm, citing now their home needs a new roof because of damage. However, your insurance company only wants to give you half the amount needed to replace the roof.

4. Making threatening statements to the policy holder.

You should never feel threatened to submit an insurance claim or push to receive money to cover your claim. If your insurance company ever does threaten you in that situation, you should consult an insurance law attorney or alert the Colorado insurance board.

5. Deceptively not informing you of coverage or misrepresenting your policy’s language.

If you have a home with older siding, you may have purchased a homeowner’s insurance rider to cover the cost of replacing that siding after damage. When strong winds blew some of that siding off, your insurance company should remind you of your rider coverage. Your company also shouldn’t try to trick you about your coverage based on your policy’s language.

You always should keep in mind that insurance companies often want to settle a claim for as little as possible and may try to deny a valid claim. If you feel your insurance company isn’t living up to your policy contract, you should consult an insurance law attorney. An attorney can help evaluate if seeking a bad faith claim might be your best option to get the coverage you’ve paid for.

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The Law Office of Samuel G. Livingston, P.C.
25188 Genesee Trail Road Suite 140
Golden, CO 80401

Phone: 720-443-5876
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