For most Americans, insurance coverage is a necessary part of life.
State laws require us to carry insurance for the vehicles we drive, health insurance safeguards us from potentially catastrophic medical expenses, and liability insurance is typically required for many businesses to legally operate in the state of Colorado.
No matter your opinions of big insurance companies, they have a very real role to play in our everyday lives. As needed as they are, it’s important to remember that insurance companies provide a service in exchange for money (typically in the form of the premiums you pay every month).
When you don’t receive proper treatment that is in-line with your agreement with the insurer, your rights as a consumer are compromised. Unfortunately, this happens more than it should, and in this article, the legal professionals at Matt Osborne, PC are revealing some of the most common ‘Bad Faith’ tactics used by some insurance companies.
These tactics are often intentionally orchestrated by larger insurance companies, but remember that an insurance company of any size and scope can engage in bad faith practices. The key is to remain aware of what these tactics are and know what to do if you believe you are a victim of such unscrupulous treatment.
What Is a Bad Faith Tactic?
An insurance company can be said to be operating in Bad Faith any time it does not uphold its obligations as they’re stipulated in the insurance contract.
Bad Faith insurance practices can take many forms. Because there is no easy way to describe all of the possible examples of Bad Faith insurance, we’re going to explore some of the common ones we’ve encountered in our experience as consumer rights advocates.
Unsubstantiated Claim Denials
When you experience a property loss that is covered by an active insurance policy, step one is to file a claim with your insurance provider. In the case of healthcare coverage, you are owed adequate compensation that is in accordance with the type and scope of the insurance coverage you had at the time of treatment.
In either case, when the time comes to settle a claim with your insurance company, one of two outcomes is likely: claim approval or claim denial.
When you claim is approved, you receive compensation or a debt settlement as you should. It is, after all, what you pay for when you pay your premium every month. However, if your claim is denied and there is no reason provided, you could have a case of Bad Faith insurance practice on your hands.
Not Investigating a Claim Thoroughly or in a Timely Manner
When insurance companies drag their feet during the processing of a claim, it’s possible they’re doing this on purpose. Sometimes, insurers will drag out the claim investigation process over months, or they may not even conduct an investigation at all.
If this happens to you without a reasonable explanation as to why, you could be experiencing a Bad Faith insurance scenario.
‘Low-Balling’ Claim Settlements
This is one of the most common forms of Bad Faith insurance practices in Colorado.
When an insurance company knowingly offers a settlement that is a fraction of the loss incurred by the insured, the insurer is not acting in good duty to the insured. The reason these companies do this is because, often, they’re expecting you to ask for more money, so they intentionally frame the negotiation in a way that results in them keeping more of their money.
Failing to Adhere to the Law or Policy Language
Colorado state law requires that insurance companies must be honest and truthful in their representations of the law that governs their relationship with you and the policies that you purchase.
Any time an insurer communicates falsely about terms and conditions or about insurance law here in Colorado, they’re acting in Bad Faith.
Withholding Requested Documentation
It is the duty of insurance companies to provide all relevant documentation related to a policy, claim, or decision. Not doing so is an excellent example of a Bad Faith insurance tactic.
What to Do When Bad Faith Happens to You
If you believe you’ve been a victim of Bad Faith insurance practices here in Colorado, know that you have rights as a consumer—rights we will help protect and uphold in a court of law.
You don’t have to acquiesce to the demands of big insurance. We suggest you gather all the documentation you have, and then schedule a consultation with Matthew R. Osborne, PC, today.
To learn more about bad faith insurance, be sure to check out our blog: Bad Faith Insurance and You.