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What constitutes bad faith on the part of an insurer?

On Behalf of | Aug 19, 2022 | Property Damage Insurance Claims |

Insurance protects individuals from unforeseen incidents. Fire burns down a home. A car accident decommissions a vehicle. Sickness triggers mounting hospital bills.

Specific policies provide money to compensate for these scenarios. Unfortunately, some insurers act in bad faith. Such companies may deny claims, delay payment or pay less than they should.

Signs of bad faith from an insurer

Certain clues hint at impropriety on behalf of insurance companies. Unethical insurers deny coverage without reasonable justification. Despite evidence that a situation deserves payment, an illogical rationale explains the decision. Absent a justification for the denial, partial compensation may arrive. It falls on the victim to make up the balance.

Insurance entities sometimes wrongfully cancel or fail to renew policies without warning. Slippery representatives might fail to communicate or thoroughly investigate cases.

Deceptive business practices are never okay. Insurers may hide evidence showing a claim is legitimate and deserves a payout.

Actions to take when an insurer is acting in bad faith

One can fight insurance companies that are not fulfilling their legal obligations. Before getting litigious, contracts need review. This step clears the possibility of misunderstandings. Saving every scrap of correspondence is essential in the event of a trial. After appealing a denial, the individual should write a demand letter. Its contents must state that litigation will be forthcoming without the desired response. If there is no favorable reaction, the next step is to file an official complaint with the government.

Not every insurance company stays honest. Knowing the indicators of duplicity and how to react helps consumers collect restitution.