How to Recognize Bad Faith Insurance Tactics
Insurance companies are supposed to be there when we need them most. Whether it's for car accidents, medical emergencies, or property damage, we count on them to have our backs.
Unfortunately, not all insurance companies play fair. Some resort to bad-faith tactics to avoid paying claims or minimize what they owe. At Tormey & McConnell, we understand the financial and emotional strain bad faith insurance practices can cause, and we’re here to help you recognize when an insurance company isn’t holding up its end of the bargain.
Bad-faith insurance tactics are illegal and can have serious consequences for both the insurance company and the people who rely on its services. Whether you’re dealing with an insurance company in Amarillo, Canyon, Dumas, Pampa, Hereford, Childress, Borger, or beyond, our firm is dedicated to protecting your rights. If you suspect bad faith practices, we encourage you to reach out to us and speak with an experienced insurance law attorney today.
What Is Bad Faith Insurance?
Bad faith insurance occurs when an insurance company acts dishonestly or fails to honor its contractual obligations to policyholders. This behavior might range from delaying or denying claims unjustifiably to making unfair settlement offers.
When an insurer doesn’t act in good faith, it violates the trust and legal agreements it has with policyholders. This can have dire consequences for the policyholder, leaving them struggling with unpaid claims at a time when they need help most.
Common Bad Faith Insurance Tactics
Insurance companies can use various tactics to avoid paying claims or reduce the amount they pay out. Some of the most common bad faith tactics include:
Delaying the claims process: This is one of the most frustrating tactics insurers use. By delaying your claim, the insurer hopes that you’ll give up or accept a smaller settlement.
Denying a claim without explanation: If your insurer denies your claim without providing a valid reason, it could be a red flag that they’re acting in bad faith.
Misleading policyholders: Insurers may mislead clients about their coverage or the process of filing a claim, making it harder for you to get what you’re owed.
Offering a low settlement: Insurers might offer a settlement that is much lower than what you’re entitled to, hoping you’ll accept it because you feel pressured or uninformed.
Not conducting a fair investigation: In some cases, insurance companies fail to conduct a thorough investigation into claims or use biased investigators to minimize liability.
It’s important to recognize these red flags early so that you can take action before they cause you further harm.
How to Spot Bad Faith Insurance Tactics
Recognizing when an insurance company is acting in bad faith isn’t always easy. However, there are a few signs to look out for that may indicate bad-faith behavior. Red flags to watch for include:
Unreasonable delays in processing claims
Refusal to pay legitimate claims
Lack of communication or transparency
Pressure to accept an unfair settlement
Failure to investigate the claim thoroughly
If you notice any of these signs while dealing with your insurer, you may be facing bad-faith tactics. When in doubt, consulting an insurance law attorney can help clarify your situation.
What to Do if You Suspect Bad Faith Insurance Tactics
If you suspect that an insurance company is acting in bad faith, it’s crucial to take action. Here’s what you can do:
Document everything: Keep a detailed record of all communications with your insurance company, including emails, phone calls, and written correspondence. This will be vital evidence if you need to take legal action.
Review your policy: Understand your coverage and the terms of your policy. Insurers can’t deny a claim based on terms that aren’t in the policy.
Contact your insurance company: If you feel that the insurer is stalling or being dishonest, contact them and request an explanation. Sometimes issues arise from miscommunication, so it’s worth trying to resolve them directly.
Consult an insurance law attorney: If your insurer isn’t cooperating, it may be time to seek legal advice. A lawyer can help you determine if bad faith tactics are being used and advise you on the best course of action.
Taking these steps will help protect your interests and assure you’re prepared to take the necessary action if your insurance company is acting in bad faith.
Legal Options for Bad Faith Insurance Claims
If you have been the victim of bad faith insurance tactics, you have legal options. The law allows you to take action against insurers who fail to meet their obligations. As your trusted insurance law attorney, we can help you seek compensation for damages caused by bad faith practices, which may include:
Compensation for financial losses: This could include reimbursement for the full amount of your claim, as well as any additional costs you incurred due to the insurer’s bad faith actions.
Punitive damages: In some cases, insurers who engage in bad-faith tactics may be required to pay punitive damages as a penalty for their actions.
Attorney’s fees and costs: If you’re successful in your bad faith claim, the insurer may be required to cover your attorney’s fees and expenses associated with the lawsuit.
Taking legal action is often the most effective way to hold insurance companies accountable and pursue fair compensation.
Common Examples of Bad Faith Tactics in Different Types of Insurance
Bad faith insurance tactics can appear in many forms, depending on the type of insurance you have. Here are some examples of how these tactics can appear across different insurance types. Auto insurance tactics can include:
Denying legitimate car accident claims: If you were involved in a car accident and your claim is unfairly denied, you might be dealing with a bad-faith tactic. Auto insurance companies may deny claims based on unsubstantiated reasons or delay payments, hoping you’ll accept a lower offer.
Offering settlements far below the value of your claim: Sometimes, insurers offer low-ball settlements that don’t come close to covering your medical bills, vehicle repairs, or lost wages.
In these cases, it’s crucial to document everything and seek legal assistance to hold the insurer accountable. If you believe your settlement offer is unfair, don’t accept it without consulting with an insurance law attorney. Health insurance tactics can include:
Denying necessary medical procedures: Health insurers may deny coverage for essential medical treatments or procedures, arguing that the treatment isn’t covered or medically necessary.
Unfairly limiting coverage: Insurance companies may place arbitrary limits on coverage that aren’t outlined in the policy, leaving you stuck with unpaid medical expenses.
You have the right to appeal these decisions, and an attorney can help guide you through the process. Always review your policy and consult a lawyer if an insurer tries to limit your coverage unfairly. Homeowners insurance tactics can include:
Refusing to cover legitimate damage: Homeowners insurance companies may refuse to cover damage caused by events such as storms or fires, even though the damage falls under the policy terms.
Underestimating repair costs: Insurers may try to undervalue repairs, offering a settlement that doesn’t cover the full cost.
If your insurer refuses to cover legitimate damage, it’s important to challenge their decision and seek professional legal help. You may need to get independent estimates to prove that the insurer’s offer is insufficient. Recognizing these tactics across different types of insurance claims is vital to protecting your rights.
What Happens After You File a Bad Faith Insurance Lawsuit?
If you decide to take legal action for bad faith insurance practices, the process typically involves the following steps:
Consultation with an insurance law attorney: This is the first step. We’ll assess your case, review your insurance policy, and discuss the details of your claim.
Investigation: If we believe bad faith has occurred, we’ll investigate the insurer’s actions, gather evidence, and prepare your case for court.
Negotiation: In some cases, insurers may offer to settle the claim outside of court. We’ll negotiate on your behalf to seek a fair settlement.
Court proceedings: If a settlement can’t be reached, we’ll take your case to court. We’ll represent you throughout the process and fight for fair compensation.
If you’ve experienced bad faith tactics from an insurance company, reach out to an experienced insurance law attorney who can guide you through the process.
Dependable Legal Help
At Tormey & McConnell, we understand the toll bad faith insurance tactics can take on your life. We’re committed to helping clients in Amarillo, Canyon, Dumas, Pampa, Hereford, Childress, Borger, and beyond protect their rights and fight back against dishonest insurance practices. If an insurance company has mistreated you, don’t wait to take action.
Reach out to us today for a consultation with an experienced insurance law attorney. We’re here to help you seek fair compensation and hold insurers accountable for their actions. Let us help you get justice.