Expert Restoration reports that the IRMA, an organization that facilitates communication between and among professionals in the risk management and insurance fields, defines insurance bad faith as blatantly unfair conduct on the part of an insurance company that goes well beyond mere negligence.
But how can you tell if an insurance company is dealing with you in bad faith? Numerous red flags exist that can indicate bad faith practices.
Failure to properly handle your claim
Insurance companies have the obligation to pay all valid claims against their policyholders in a reasonably expeditious manner. Consequently, bad faith red flags can include the following:
- The company fails to immediately acknowledge your claim.
- It fails to conduct a prompt and thorough claim investigation.
- It demands unreasonable proof of loss documentation from you.
- It intentionally misinterprets or misconstrues the information you provide.
- It misrepresents the policy coverages and other provisions.
- It falsely accuses you of making a spurious or illegal claim.
Failure to properly pay your claim
In addition to deliberately mishandling your claim, further bad faith red flags, including the following, can arise regarding payment of it.
- The company aggressively tries to talk you into accepting an unreasonably low settlement amount.
- It unreasonably delays or fails to make the payments to you or your attorney that it agreed to make.
- It denies your claim without providing you with a reasonable basis for such action.
Insurance bad faith lawsuit
When making an insurance claim, be sure to keep all the paperwork associated with it. If you believe you are a victim of insurance bad faith, you will need to prove your allegations in court when you bring a bad faith action against the insurance company.