You pay insurance every month for your house, car and health. You rely on and trust the company you give your money to and believe the agency will come through when you are in an emergency.
Unfortunately, insurance companies do not always have your back. Have you recently been in a car accident, and your insurance company said it would not cover your hospitalization or emergency room visits? Why is it doing this, and what can you do to get the money you need to pay your bills?
Key Takeaways
- Bad faith insurance occurs when an insurance company fails to uphold its legal obligation to act fairly and honestly with policyholders.
- Common examples include unjustified claim denials, payment delays, lowball settlement offers, and misrepresenting policy language.
- Document everything—including letters, emails, expert reports, and texts—to build a strong case if you suspect insurer misconduct.
- You may be able to sue your insurance company for bad faith, but you must have solid evidence showing their breach of duty.
- Being proactive and organized when filing a claim can protect you and your family in times of crisis.
Bad faith insurance examples
Bad faith insurance is dishonest and illegal. It refers to the insurance companys attempt to back out on its promise to cover obligations outlined in your policy. Some examples of how an insurance company may breach the implied duty of good faith and fair dealing include:
- Not paying on a valid claim
- Misrepresenting claim information
- Unjustified denial of a valid claim
- Using intimidation to get you to accept a lower settlement payment
- Delaying payment on a valid claim
- Offering less money than the claim is worth
- Misrepresenting law or policy language
- Refusing requests for documentation
Bad faith lawsuits
If you believe your insurance company did any of the examples listed, you may sue them. However, you must have proof to back up your claim. Keep all documentation and correspondence from the people involved. You can use:
- Letters
- Emails
- Appraisals
- Expert reports
- Texts
You want to make sure you do all you can to protect yourself and your family during emergencies. Be proactive and keep a file of all documentation when you file a claim with your insurance company.
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