Not all insurance companies are created equal. Even the large, national insurance firms out there often operate in a way that puts profits over their insured customers. While there are many ways to make money as an insurance company, what insurance companies cannot legally do is conduct business in ‘bad faith’.

Holding Insurance Firms Accountable

When an insurance company makes a decision or takes an action that isn’t in accordance with legal standards of fair and reasonable treatment of the insured, there is something that can be done by the affected consumer.

At Matthew R. Osborne, PC, we help our clients fight bad faith insurance by developing a strategy for documentation and litigation, if necessary. In many cases, our clients don’t feel like they have any place to turn during or after an act of bad faith on the part of the insurance company.

In this article, we’ll be explaining how we assist our clients by representing their interests in cases of bad faith insurance practices. And, we’ll be sharing with you some crucial information that could mean a world of difference between being taken advantage of and obtaining justice for your case.

What Exactly Is a “Bad Faith” Insurance Practice?

how to sue an insurance company for bad faith 2Interestingly, there is no hard-and-fast, universally accepted legal definition of ‘Bad Faith’ insurance practices. The phrase itself is used as a catch-all term to describe any dishonest or unfair action or decision that an insurance company may make.

Whether or not your insurance company has acted out of bad faith will hinge on their actions and decisions in light of the terms and conditions of whatever insurance coverage was in place at the time of the action or decision.

To fight bad faith insurance, it may help to better understand some examples that illustrate the many ways that insurance companies can operate in a dishonest or dubious manner. Let’s consider the following examples:

  1. Insurance claim denial without explanation – Any time an insurance company denies a claim filed by a validly insured claimant, the insurance company should always provide a reason for the denial.If no reason is provided or if the reason provided is obscure, irrelevant or intentionally confusing, the case could be made that the insurance company is operating in bad faith.Example: A home insurance company denies a claim for repairs to a roof damaged by hail in Colorado. The insured simply receives a letter informing them of the denial, with no supporting reason or explanation as to why the denial decision was made.
  2. Undervaluing a claim or offering a settlement that is far lower than what is reasonable for the claim – This is fairly common, especially with larger insurance claims. Insurance policyholders who pay their premiums on-time deserve adequate settlements that reflect the real losses incurred.

When an insurance company offers a settlement that is far lower than what can be shown to have been lost by the insured, a bad faith insurance case could be brewing.

Example: A car insurance policyholder is involved in an accident that requires $10,000 of medical expenses, all of which are technically covered by the terms of the policy. The insurance company, however, only approves a settlement of $5,000, even though there is proof of required medical expenses that far exceed $5,000.

  1. Using intimidation or threats to ‘push around’ or ‘bully’ policyholders – We like to

think that all insurance companies operate in a professional manner. This doesn’t always

happen, however, and when insurance companies resort to making threats, it could be

time to fight bad faith insurance.

Example: After a homeowner files a claim for fire damage done to his backyard shed,

the insurance company accuses her of arson and threatens to involve the police.

These are just examples of fictitious situations that could be developed into legitimate cases against insurance companies. Every case is different.

Take Action Against Bad Faith Insurance Now

If there is a potential instance of bad faith insurance practice, we always advise our clients to schedule a consultation with us before signing any settlement or agreeing to any offer provided by the insurance company.

Only after we’ve conducted our due diligence as attorneys can we advise you regarding next steps and possible litigation.

To learn more about how the consumer advocate attorneys at Matthew R. Osborne, PC help fight bad faith insurance, contact us today.

[Disclaimer: The information contained herein is not intended to be considered legal advice. The attorneys at Matthew R. Osborne, PC are expert consumer rights professionals who assist clients in legal affairs related to bad faith insurance cases. For more information on how we might help with your unique situation, a free consultation is highly recommended.]