Insurance is an excellent tool for managing risks. When you sign up for the cover, you transfer the risk in question to the insurance carrier. But what happens when the insurance company turns its back on you when you need them most?
Bad faith insurance happens when the insurance company attempts to renege on its obligation to the policyholder. If the insurance company is refusing to reimburse you for an expenditure that is covered by your policy, do not sit back and do nothing about it. Instead, consider pursuing a bad faith lawsuit against the insurance company in question.
Understanding bad faith claims
A bad faith claim does not just arise because you have not received the settlement you are entitled to. There are a variety of ways the insurance company’s actions can amount to bad faith. Here are some of them:
- The insurance company doesn’t investigate the claim thoroughly, leading to your claim’s denial
- The insurance company takes too long to release your pay
- The insurance company is not keen to negotiate and settle your claim
If the insurance company is engaging in these kinds of tactics, then there is a pretty good chance they are acting in bad faith. Here are two steps you need to take if this is the case:
Document your claim
Before taking any action against the insurance company, start off by gathering the documentation you will need to strengthen your case. This refers to any correspondence between you and the insurance company, as well as the evidence you submitted to support your claim.
File your bad faith claim
With your evidence in hand, consider pursuing a bad faith claim against the insurance carrier. If it is established that the insurance company indeed acted in bad faith, then the court may order them to pay the original compensation alongside the litigation costs.
When the insurance company acts in bad faith in your hour of need, you deserve justice. Find out how to safeguard your rights by pursuing a bad faith claim.