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7 Examples of Bad Faith Insurance Practices

Having an insurance claim wrongfully denied or significantly undervalued is not only frustrating, but it is also illegal.

Title 10. Insurance § 10-3-1104 demands that insurance companies conduct themselves with transparency regarding policyholder claims. It is unlawful for an insurance provider to undervalue or deny a claim without providing a valid basis for the denial or benefits reduction.

Here are seven examples of bad faith insurance practices:

#1 - Failing to Communicate

Your insurance provider is required to alert you regarding important information about your claim, and they must make you aware of their decisions in a timely fashion. Insurance company representatives may not ignore your inquiries or fail to communicate their conclusions with you.

#2 - Indefensible Denial

This occurs if your claim is denied for no obvious or justifiable reason.

#3 - Indefensible Delay

This occurs if the insurance provider fails to confirm, deny, or pay claims within a reasonable amount of time. This can also happen if the provider fails to address a time-limit demand.

#4 - Unreasonable Demands

Insurance companies often need specific documentation to help them make a determination regarding a claim, but if these demands are for irrelevant documents and other items to delay the process, it may be in bad faith.

#5 - Lack of an Adequate Investigation

Insurance providers might attempt to use deceptive, illegal, or immoral tactics to investigate your claim. It’s also not unheard of for providers to deny claims outright without conducting an investigation at all.

#6 - Undervaluing Claims

Bad faith can occur if an insurance provider offers a significantly lower settlement than the actual value of your claim.

#7 - Policy Changes

Your insurance company may be acting in bad faith if they try to alter or cancel your policy once the claim is filed. Then, they may provide new reasons for denying your claim.

If you believe that your insurance provider has acted in bad faith, it’s in your best interest to seek a skilled insurance attorney right away to help with your case. Our team is highly experienced in this area of the law and has helped many others in similar situations. Let us see if we can help you, too.

Contact our team at today to discuss the details of your case.

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