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What Is a Bad Faith Demand Letter?

If an insurance company treats a claim in bad faith, it has handled it in a way another insurer would not have in the same situation. Bad faith insurance dealings can range from denying a valid claim to unnecessarily drawing out an investigation. If you believe your insurance company is guilty of committing bad faith, you or an attorney can take action to resolve your claim. One of the first steps is to file a bad faith demand letter with the insurance provider.

When to File a Bad Faith Demand Letter

A bad faith demand letter is a formal written statement that demands action from the insurance company to remedy its bad faith practices. It points out the bad faith practice the insurance company or one of its agents has committed, describes the issue briefly and demands a fair amount to resolve the case. You might need to file a demand letter if the insurance company is guilty of committing an act of bad faith.

  • Unreasonably delaying the handling of a claim
  • Inadequately investigating a case
  • Demanding too much proof
  • Refusing to make a reasonable settlement offer
  • Making bad faith arguments
  • Refusing to defend a lawsuit
  • Making threats against you
  • Intentionally being dishonest during your claim
  • Violating the basic standards of honest business
  • Denying a valid insurance claim

Any action or omission that a reasonable, honest and prudent insurance company would not have committed under similar circumstances could constitute bad faith. Insurance bad faith could cause you considerable hardship as a claimant. It could make it difficult or impossible to obtain the fair compensation you need to move forward. If you suspect an insurance company of committing bad faith, contact a lawyer to help you write and file a powerful demand letter.

Can I Get Help From an Attorney?

A well-written demand letter could push an insurance company to revisit your claim and revise the way it has been handling things. It could save you from potentially settling your claim for less than it is worth or walking away with nothing. The best way to ensure you craft a bad faith demand letter properly and send it on time is to hire a lawyer. A bad faith insurance attorney in Phoenix can review your case and help you create a demand letter that follows all applicable rules and best practices. A insurance bad faith attorney can draft a letter that may convince the insurance company to offer a fair settlement.

What Are the Basics to Writing One?

The point of a bad faith demand letter is to call the insurance company out for its inappropriate handling of your claim and to demand a fair resolution. A demand letter is a formal document that seeks payment for your losses according to the stipulations of your policy. It is a type of complaint against the insurance company for its treatment of your claim or the bad faith actions of a claims adjuster. A typical demand letter consists of 10 main elements.

  1. Your full name and address
  2. The date
  3. The name and address of the recipient
  4. Date of the accident in question
  5. A sentence stating this is your formal written demand for x amount of money
  6. A sentence or two describing the act of alleged bad faith
  7. A statement saying you are prepared to take your case to court, if necessary
  8. A repeat of the amount you are seeking to resolve the case
  9. A deadline by which the company must respond
  10. Your signature

The bad faith demand letter should be clear, succinct and brief. It should be effective at communicating your grounds for the demand and the amount you are requesting to settle the case. It should use an appropriate tone and professional language. You or your lawyer should submit the demand letter promptly, either through mail or email. Get a return receipt for proof of mail.