There are certain circumstances when an insurer fails to pay an insurance claim that it may be considered bad faith. In those circumstances, people who have insurance should know what steps they may be able to take against a bad faith insurer.
Steps to take
There are several steps that insurance customers can take to determine the right option for them when making a bad faith insurance claim including:
- Review their insurance contract: The insured should review their insurance policy which is a contract between them and their insurer. They should first determine if the insurance company has breached the contract.
- Keep records: The insured should keep records including all of their documents and evidence. This can include any photos, reports, receipts, estimates or correspondence with the insurance company. They should keep details notes of their interactions with the insurance company including any calls and meetings.
- Document any claim denials: The insured should document any claim denials and also request that they be reviewed by a supervisor. They may also want to appeal the denial of the claim to their state’s insurance regulatory agency.
- Make a final demand: The insured should send a written demand letter to attempt to settle the lawsuit prior to making a claim. It is important to retain proof that a final demand letter was send.
- File a complaint with state department of insurance: If the insured believes their claim has been mishandled, or they have not received a timely settlement, they may want to file a complaint with their state’s insurance regulatory agency.
- Initiate a bad faith lawsuit: The insured may wish to file a bad faith claim in court of other possible remedies have been unsuccessful.
Bringing a claim for insurance bad faith can be complex so it is helpful to understand those complexities but it is also important for the insured to understand their rights and protections when an insurance company has refused in bad faith to pay their claim. Insurance bad faith can be a serious issue for insureds seeking coverage for their medical care or seeking coverage on a homeowner’s policy, making possible remedies important information to have.