Insurance policies are meant to provide peace of mind, ensuring that if something goes wrong, you can rely on your insurer to uphold their end of the contract and cover legitimate claims. Unfortunately, there are times when an insurance company might act in bad faith, either by denying your claim, delaying payment, or offering far less than what your policy promises. Recognizing the signs of bad faith can be difficult, but understanding the key indicators is the first step to protecting your rights.

1. Unreasonable Delays in Processing Your Claim

One of the most common signs of bad faith is unreasonable delays in processing your insurance claim. While it’s normal for some claims to take time due to investigation or other factors, excessive delays with no clear explanation can be a red flag. In many cases, insurance companies are legally required to handle claims promptly and within a reasonable period of time. If your insurer is dragging its feet without providing valid reasons for the delay, it could be an indication that they are acting in bad faith.

For example, if your insurance company repeatedly asks for unnecessary documents or information after you’ve already provided sufficient evidence, this could be a tactic to stall the process and wear you down. It’s important to keep detailed records of all your interactions with your insurer, including the dates you submitted documents and their responses, as this documentation can be crucial in proving bad faith later on.

2. Denial of a Valid Claim Without Explanation

Another clear sign of bad faith is when an insurance company denies a valid claim without providing a reasonable explanation. Insurance policies are contracts, and when you’ve met all the conditions outlined in the policy, the insurer is obligated to pay your claim. If your claim is denied and your insurance company fails to explain why or gives an unjustified reason, it’s possible they are acting in bad faith.

In these situations, it’s important to request a written explanation for the denial. Your insurer should be able to provide specific reasons based on your policy. If the explanation is vague or doesn’t seem to align with the terms of your coverage, you may have grounds to dispute the denial and seek legal assistance to challenge the decision.

3. Offering an Unreasonably Low Settlement

Sometimes, rather than outright denying a claim, an insurance company will offer a settlement that is far below the actual value of the loss. This is another tactic used in bad faith, as insurers may try to pressure policyholders into accepting lowball offers to save money. If the settlement offer doesn’t cover your expenses or damages as outlined in your policy, it’s essential to question the amount and seek a full explanation from your insurer.

Remember, you have the right to negotiate a settlement. If you feel the offer is too low, you can present additional evidence to support your claim. However, if your insurance company refuses to adjust the offer despite clear evidence of the higher value, this could be a sign of bad faith, and it may be time to consult an attorney who specializes in insurance disputes.

4. Misrepresentation of Policy Terms

Another bad faith tactic is when an insurance company misrepresents the terms of your policy. This can take many forms, such as claiming certain damages or incidents aren’t covered when, in fact, they are explicitly included in your policy. Misrepresentation can also occur when an insurer alters the interpretation of policy language to avoid paying a claim.

If you suspect your insurer is misrepresenting your policy, carefully review the policy document yourself or have it reviewed by a legal professional. Compare the language in the policy to the reasons your insurer is giving for not covering certain losses. If there’s a discrepancy, it’s possible your insurance company is acting in bad faith, and you may need to take further action to ensure your claim is honored.

5. Failure to Conduct a Thorough Investigation

An insurance company is obligated to conduct a thorough investigation before approving or denying a claim. However, if the insurer fails to perform a proper investigation or does so in a hasty and incomplete manner, this could be another sign of bad faith. Insurers are required to gather all relevant information and assess the facts fairly before making a decision.

If your claim is denied quickly without any indication that a full investigation was conducted, or if the insurer ignores key evidence that supports your claim, you may be dealing with bad faith practices. In these cases, it’s important to document the lack of investigation and gather as much evidence as possible to support your case, as this can be pivotal in proving bad faith later on.

What Can You Do If Your Insurance Company Is Acting in Bad Faith?

If you believe your insurance company is acting in bad faith, you don’t have to accept their unfair practices. There are several steps you can take to protect your rights and ensure that your claim is handled fairly:

• Document everything: Keep detailed records of all communications with your insurance company, including emails, letters, phone calls, and any documents you submit.
• Request written explanations: Always ask for written explanations for any claim denials or low settlement offers.
• Review your policy: Carefully review your insurance policy to understand what is covered and what isn’t. If necessary, consult with an attorney to interpret the policy language.
• Contact an attorney: If you suspect bad faith, reach out to a bad faith insurance attorney who can help you evaluate your options and pursue legal action if necessary.

Our experienced team of attorneys at Bell & Pollock is dedicated to helping policyholders fight back against bad faith insurance practices. We understand how frustrating it can be to deal with an insurer that isn’t holding up their end of the bargain, and we are here to ensure you get the compensation and treatment you deserve under your policy.

If you believe your insurance company is acting in bad faith or if you have questions about your rights, don’t hesitate to contact us today. We are ready to stand by your side and help you fight for fair treatment.