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3 forms of bad faith insurance that can hurt you after an injury

On Behalf of | Apr 22, 2021 | Uncategorized |

Insurance is an investment that protects you from liability or losses in unpredictable situations. Your homeowner’s insurance will help repair your home after or tornado or replace your property after a robbery. Car insurance will cover the cost of repairs to vehicles or injuries that people suffer in a collision.

Generally speaking, people who file claims with insurance companies expect quick and generous settlements of their claims. Unfortunately, while both federal and Ohio state laws do require that insurance companies fulfill obligations to their policyholders in good faith, some companies try to avoid their responsibilities.

Bad faith insurance practices involve a company intentionally trying to avoid paying what they should on claims against policies that they wrote. Although bad faith insurance can take many forms, the three forms listed below are arguably the most common.

  1. The company denies a claim that clearly falls under the policy’s coverage

The most obvious and frustrating form of bad faith insurance is the outright denial of a reasonable claim. Insurance companies may issue a denial based on a technicality or even a willful misinterpretation of circumstances, hoping the claimant doesn’t pursue the issue.

  1. The company makes someone wait unreasonably long for payments

Your costs or losses after something occurs will be immediate, whether you need repairs to your house or medical care. Some insurance companies might delay claim processing for months in the hope that people will stop pursuing the issue. Although the law does require timely processing, there are claims where individuals face unnecessary and unfair delays that could constitute bad faith practices. 

  1. The company offers a settlement in the hope of tricking the claimant

Negotiating a settlement is an art form, and there is something to be said for having an expert negotiator helping you deal with the insurance company. However, settlement practices can sometimes veer from merely aggressive into outright inappropriate.

Insurance companies may try to trick or pressure someone into accepting a settlement that may only reimburse them for a fraction of their medical cost for lost wages. After settling, that individual typically has few options other than a bad faith insurance claim for recouping the difference between the settlement amount and their actual financial losses.

Pursuing bad faith insurance claims can help you recover your losses when an insurance company doesn’t uphold their own policy and create consequences for the company that might prevent them from doing the same thing to someone else in the future.