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How Do I File a Bad Faith Claim Against a Health Insurance Company?

All insurance providers have a legal duty to treat their clients in good faith and fair dealing. This means that they must handle claims in an honest and reasonable attempt to resolve them according to applicable laws and policy terms. If a health insurance company fails to live up to this standard of client care, it may be guilty of insurance bad faith. If so, the impacted client can file a bad faith claim against a health insurance provider in pursuit of financial compensation.

What Is Health Insurance Company Bad Faith?

Bad faith refers to an insurance company negligently or intentionally mishandling a claim or mistreating a client. Bad faith is often committed in an attempt to save the insurance company money, as insurance companies are for-profit organizations. A health insurance company could act in bad faith during many stages of the insurance process, from the time that it sells a policy to an insured person to when it processes a filed claim. Examples of health insurance bad faith include:

  • Intentionally misrepresenting the terms of a policy during its sale
  • Ignoring a claim or failing to communicate with the client
  • Inadequately investigating a health insurance claim
  • Denying a health insurance claim without a valid reason
  • Refusing to pay an adequate amount in insurance benefits
  • Delaying the processing of a valid claim
  • Delaying a payout once a claim settlement is reached
  • Using threatening language against a client during a claim

If you believe that your health insurance company mistreated you in any way before, during or after a claim, you may be entitled to financial compensation to penalize the insurer for failing to handle your claim in good faith. This is what is known as a bad-faith insurance lawsuit. It is up to you to bring a civil lawsuit against the health insurance company, however, to pursue compensation for bad faith.

How Do You File a Claim?

There are certain steps that you must take to bring a bad faith cause of action. First, find out if you are within the statute of limitations. This is a deadline on the ability to file your type of claim. The deadline changes from state to state. In Arizona, the statute of limitations on an insurance bad faith lawsuit is two years. If you are within the time limit, contact an attorney for assistance with the claims process. Filing a bad-faith claim requires the following steps:

  1. Collecting evidence of insurance bad faith, such as letters from the insurance company and a copy of your health insurance policy.
  2. Obtaining the correct forms to file a lawsuit from the civil courthouse in your county and properly filling them out.
  3. Proving your claim by demonstrating that the health insurance company is guilty of conduct that breaches the insurer’s duty of care or fulfills the definition of insurance bad faith.
  4. Negotiating a settlement with the health insurance company, or proceeding to trial if settlement negotiations don’t work.

Note that if your health insurance claim involves a plan given to you by your employer, you most likely cannot file a lawsuit for insurance bad faith. This is because the federal law that covers employer plans, ERISA, does not permit bad faith claims in most scenarios. ERISA does not cover every type of health care plan, however. Find out if you have the right to file a bad-faith lawsuit against a health insurance provider by talking to an attorney.

Why You Should Hire a Bad-Faith Insurance Lawyer

The legal side of a bad-faith claim can be difficult and confusing. A successful lawsuit against a health insurance provider in Arizona requires considerable planning, organization, paperwork and in-depth knowledge of insurance law. With assistance from an attorney, however, you can rest and relax while an experienced and licensed professional handles the legwork of your case for you. Learn more about how an insurance bad-faith lawyer can help you by contacting Surrano Law Offices today. We have years of experience going up against health insurance providers.