How to Fight Accusations of Insurance Bad Faith

How to Fight Accusations of Insurance Bad Faith

Whether a policyholder feels taken advantage of under the terms of the coverage policy or is frustrated that their claim has not been quickly processed, there are multiple reasons why policyholders file bad faith claims against their insurance carriers. While there are legitimate claims, there are also many situations where the policyholder’s claim is questionable, unfounded, or even fraudulent.

The following are common acts of bad faith which can form the basis for a legitimate claim:

  • The insurance company refuses to pay out a valid claim under the policy.
  • Deliberate delays in processing or paying out the benefits owed to a policyholder for a valid claim under the policy.
  • Intentionally misinterpret the terms of the policy to provide the insurance company an advantage in a settlement.
  • The insurance company threatens the policyholder.
  • Mishandle the investigation of a claim made by a policyholder.

The main point of all of the above acts of bad faith is that insurance companies purposefully impede or prevent fairness under the coverage policy. Although insurance carriers have a legal obligation of good faith and fair dealing, just because a policyholder is not pleased with the outcome of their insurance claim does not mean the insurance company isn’t playing by the rules.

Remember, policyholders are not entitled to the outcome that they desire if it is not provided for under the insurance policy. In other words, the insurance policy is what dictates the fate of insurance claims, not the policyholder. In the face of bad faith claims, your insurance company must fight back, even if it means litigation is necessary.

For more information, please contact our Charleston insurance defense attorneys at PHSW today.

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