When it comes to settling a claim, insurance companies are definitely in the driver’s seat. Why is that? Compared to the policyholder, they have more knowledge about how insurance really works; more negotiating power; and greater access to financial resources. To protect policyholders, insurance companies are obligated by the courts to act in good faith and fairness. However, despite consumer protection laws, bad faith practices still exist.
Your policy is considered a contract. The insurance company is mandated by law to promptly investigate and pay claims due under the policy. In Pennsylvania, this means your insurance company must communicate information about the status of a claim – and act on it – within a reasonable time frame.
Here are five bad faith tactics commonly used by insurance companies when negotiating claims:
Under Pennsylvania law, insurance companies are required to provide a prompt and thorough investigation when a claim is filed. The primary role of an insurance adjuster is to gather facts related to the claim and ultimately, make a recommendation on whether the claim is covered. If an adjuster hasn’t contacted you after making a claim, you may have grounds for a bad faith lawsuit.
Denying a Claim Without Reason
If a claim is denied by an insurance company, they are required to provide a reason in writing. Refusing to offer a reason is an example of bad faith. If you believe your claim is valid and should be approved based on the policy documents, it’s best to get an experienced attorney on your side.
Refusing to Pay a Claim
Remember, your policy is a contract. If the policy is current and in good standing, the insurance company is required to settle or pay claim within a reasonable amount of time. The definition of “reasonable” is somewhat subjective; however, you have the right to compensation. Any insurance company refusing to pay on a valid claim may be acting in bad faith.
Ignoring Requests for Documentation
Insurance companies are responsible for providing any and all documentation related to the claim upon request. This is especially important when a claim is denied. As the insured, you have a right to receive documentation. Failure on the part of an insurance company to deliver could be categorized as an act of bad faith.
Low-Ball Settlement Offers
Settlement offers considerably less than expected are not uncommon and on their own, they aren’t necessarily a clear indication of bad faith. However, if the insurance company is unwilling to negotiate or provide any explanation about specifics, you may have a right to file a bad faith claim.
If you feel like your insurance company may have acted in bad faith, it’s important to contact an attorney immediately. Contact us to speak with an experienced insurance bad faith lawyer. With offices in York and Gettysburg, our team is proud to protect the injured across the Central Pennsylvania community. Consultations are always free, we’re available 24/7, and there’s no fee unless we win for you.