5 Things an Insurance Company Doesn’t Want You to Know About Bad Faith Claims
If you get injured in an accident or your property is damaged in a natural disaster, recovering fair financial compensation requires dealing with an insurance company. Unfortunately, many insurance companies choose their own profits over the good of their clients. This can lead to challenges in obtaining the financial compensation that you deserve. The more you know about insurance bad faith, the better you can protect yourself.
They Have a Duty of Good Faith
Legally, insurance companies and their employees are obligated to handle claims in good faith. This means that the insurance company must review claims and negotiate settlements with an honest and good-faith attempt to resolve them. It is against the law for insurance companies to handle claims in bad faith, meaning to intentionally mishandle claims (often in an attempt to save money) through fraud or unfair practices.
An insurance company’s duty of good faith comes with various responsibilities owed to a policyholder. These include obeying state laws, responding to clients in a timely manner, investigating promptly, treating a client fairly, properly interpreting a policy, and offering a reasonable settlement. If an insurance company engages in bad faith practices, the client will have grounds to file a personal injury lawsuit against the insurer.
They Aren’t On Your Side
With slogans such as, “Like a good neighbor,” and “On your side,” you might believe that your insurance company wants what’s best for you when you file a claim. This is not the case. An insurance company is a for-profit organization that does not work for you. Even if you’ve never missed a payment on your premiums, the insurance company would rather make a profit and protect its bottom line than offer maximum financial compensation for your losses.
For this reason, it is important to be wary when speaking with an insurance claims adjuster or representative from the insurance company. The claims adjuster’s goal is to save the insurance company as much money as possible on your payout. This could lead to bad-faith practices such as taking too long to investigate, denying your claim without a valid reason or offering an unreasonably low settlement.
A Limited-Time Offer Doesn’t Exist
A common tactic insurance companies used to try to pressure claimants into accepting inadequate settlements is asserting that an offer is only good for a limited amount of time, or that it is the “best and final offer.” The insurance company doesn’t want you to know that this is not true. There is no such thing as a final or limited-time offer. If the insurance company refuses to offer a fair and reasonable amount for your claim, you have the power to take your case to trial for a better outcome instead.
You Can File an Injury Lawsuit Against the Insurer
If an insurance company in Arizona is guilty of bad faith while processing your claim, you have the right to file a personal injury lawsuit against the insurance company in pursuit of damages (financial compensation). You can hold an insurance company legally accountable for mishandling your claim. If you win your lawsuit, the courts may require the insurance company to pay out your original claim, plus interest. In addition, the courts may penalize the insurer for acting with fraud or malice by awarding you punitive damages.
You Have the Right to Hire an Attorney
Finally, an insurance company does not want you to know that you have the right to hire an attorney to handle settlement negotiations for you. If an insurance company is acting in bad faith and this forces you to hire an attorney, the insurance company may even be responsible for paying for your legal fees. Hiring an insurance bad faith attorney can strengthen your ability to negotiate with an insurance provider and protect your legal rights during a claim. Consult with an attorney from the very beginning of your case for the best possible outcome.