What Is Bad Faith Insurance?

We rely on insurance companies to act in good faith by honoring their obligations and providing the coverage we paid for. Unfortunately, there are instances where insurance companies act in bad faith, putting their interests above their policyholders.

Sittlery Law Firm is here to shed light on what bad faith insurance entails and explain what makes an insurer liable for bad faith. Our bad faith insurance attorney, Nick Sitterly, has ample experience and knowledge in navigating these cases.

Defining Bad Faith Insurance

We put resources and trust into insurance companies so that when unfortunate events happen, we can know that some of our losses are covered. Bad faith insurance refers to situations where an insurance company acts unreasonably or unfairly towards its policyholders.

Instead of fulfilling their contractual obligations, these companies may wrongfully deny valid claims, delay payments, or undervalue settlements. In short, you’re not getting the safety net you paid for.

In essence, it‘s an insurance company’s failure to fulfill the duty of good faith and fair dealing owed to its policyholders. Our bad faith insurance attorney can inform you if your case is liable for a bad faith insurance claim. Nick Sitterly can represent your case in legal proceedings to ensure you’re fairly compensated.

Ways an Insurer Can Be Liable for Bad Faith

Determining if your insurer is liable for bad faith can be confusing. Many tend to doubt themselves and question if pursuing legal action is worth it.

Our bad faith insurance attorney comprehensively understands the laws surrounding bad faith. Sitterly Law Firm can confidently advise you if your situation is worth pursuing legal action and help you get started on your case.

Below are some examples of how insurers could be liable for bad faith.

Unreasonable Denial of Claims

Insurance companies may unreasonably deny valid claims with proper investigation and justification. This can include denying a claim that falls within the policy’s coverage or denying a claim without providing a valid reason.

An example of an unreasonable denial is when a homeowner files a claim for property damage caused by a covered event, such as a fire or a severe storm. The homeowner submits all the necessary documentation demonstrating the extent of the damage and the claim’s validity, but the company denies the claim unjustly.

Delayed or Slow Claims Processing

Insurance companies must handle claims in a timely manner. Deliberate delays or a prolonged claims process without valid reasons can indicate bad faith. These delays can cause unnecessary financial hardships and emotional distress for policyholders.

Underpayment of Claims

When an insurance company undervalues or underpays a claim, it can be a sign of bad faith. Policyholders expect fair compensation based on their policy coverage and the extent of their losses. Underpayment can leave policyholders financially burdened and unable to recover from their losses fully.

Failure to Communicate

Insurance companies have to communicate clearly and promptly with policyholders. If an insurer fails to provide the necessary information, does not respond to inquiries, or withholds important details about policy coverage or claim processes, it can indicate bad faith.

Misrepresentation of Policy Terms

Insurance policies can be complex, and policyholders rely on insurance companies to explain the terms and conditions accurately. If an insurer intentionally misrepresents or misinterprets policy provisions, it can be an act of bad faith, as it may lead to policyholders being unaware of their rights or coverage.

Improper Investigation

Insurance companies are responsible for conducting thorough and unbiased investigations when evaluating claims. If an insurer fails to investigate a claim properly, ignores crucial evidence, or disregards expert opinions without valid reasons, it may be an act of bad faith.

Threats or Intimidation

Using threats or intimidation tactics to dissuade policyholders from pursuing legitimate claims is a form of bad faith. Insurance companies should treat their policyholders fairly throughout the claims process.

An insurance company making a simple mistake is not bad faith. Determining a valid mistake versus intentional deception can be difficult. Our bad faith insurance attorney can help assess if your case is valid and worth pursuing compensation for.

How a Bad Faith Insurance Attorney Can Help

Dealing with an insurance company can be intimidating and overwhelming for individuals without legal knowledge. Insurance companies may use various tactics to delay, deflect, or deny bad faith claims.

A seasoned attorney will be familiar with these tactics and can effectively counter them, ensuring the policyholder’s claim receives proper attention and consideration. A bad faith insurance attorney will advocate for the policyholder’s rights and interests throughout the claims process, ensuring they’re treated fairly.

The guidance of an experienced bad faith insurance attorney is crucial for understanding your case. These legal professionals specialize in protecting the rights of policyholders to hold insurance companies accountable.

Attorneys thoroughly review your case, gather evidence, and advocate to ensure you receive the compensation you deserve.

Hire Our Experienced Bad Faith Insurance Attorney

Sitterly Law Firm fights for your right to be treated fairly by your insurance company. Our bad faith insurance attorney, Nick Sitterly, will attentively listen and analyze your case to help you receive fair compensation.

Contact our bad faith insurance attorney today for a consultation.