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Six ways your insurance company may be acting in bad faith

On Behalf of | Jun 2, 2022 | Insurance Disputes

You’ve dutifully paid your insurance premiums for a long time. So, when the time comes for you to rely on your insurance policy, you expect that it’ll be there for you. Unfortunately, though, insurance companies often utilize shady tactics to try to avoid paying you the money that you’re owed.

While some of the justifications for delayed or denied claims are warranted, other times they’re not. And if your claim is wrongfully delayed or denied, then your insurance company has been acting in bad faith. This means that you may be able to take legal action against them.

Strategies insurance companies use to avoid payments

There are a lot of ways that insurance companies can try to avoid paying you what you’re owed under your policy. Let’s take a look at some of those strategies here:

  1. A lack of thoroughness in its investigation: An insurance company should move quickly to ensure that it conducts a thorough investigation into your claim. For example, a quick walkthrough of your damaged home accompanied by a subsequent claim denial is improper because a walkthrough won’t tell an adjuster much about causation. So, make sure that you’re asking questions to determine if your insurance company has been as thorough as it should be.
  2. Offering far less than your claim is worth: This is a commonly utilized tactic. Here, the insurance company simply acts unreasonably in trying to settle your claim. They offer payment that is far lower than your policy covers with little or insufficient justification.
  3. Unreasonable delays in decision-making: Your insurance company shouldn’t sit on your claim for too long, especially if you’ve been prescribed a specific course of medical treatment. This can lead to harmful results for you. Therefore, if your insurance company hasn’t made a decision on your policy for a significant amount of time, then you might want to ask if your insurance company is acting in bad faith.
  4. Making statements that are threatening in nature: Sometimes insurance companies act aggressively to deny a claim. This aggressiveness might even go so far as to be accusatory, such as an insurance company claiming that it will report you for fraud if you challenge its denial of your claim. This is bad faith, and you shouldn’t let it frighten you into inaction.
  5. Refusing to provide documentation: If your insurance company has denied or delayed your claim for a specified reason, then you have a right to documentation that supports that decision. If your insurance company refuses to provide you with that documentation, then they’re likely trying to hide wrongdoing and are therefore acting in bad faith.
  6. Delaying payment: Even if an insurance company agrees to pay your claim, it can act in bad faith by delaying payment. After all, insurance companies are trying to make money, and they can do so by holding off on paying out claims. But this can put you in a financial bind that you don’t deserve.

Hold insurance companies accountable for their bad faith

By purchasing an insurance policy, you’ve put a certain amount of trust in the agreement that you’ve entered into with your insurance company. Don’t let your insurance company then turn around and take advantage of you by acting in bad faith.

Instead, diligently gather the evidence that you need to prove that your insurance company is acting improperly. Then, think about whether you need an aggressive legal advocate on your side to try to secure some accountability and recover the compensation that you’re owed.