What is Bad Faith? 

Insurance companies must abide by their insurance policy contracts and handle your claim in good faith. It is their obligation to uphold their promise of good faith and fair dealing in your contractual agreement. In some cases, insurance companies fail to do this and attempt to make a profit off of the insured. When the insured’s rights are disregarded and the insurers fail to fulfill their pledge of good faith, policyholders are left unpaid or denied for their loss.

Insurance bad faith is present in both first and third party claims. 

Some signs of bad faith practices include the following actions:

  • Misrepresentation of policy terms 
  • Misrepresentation of policy benefits 
  • Misrepresentation of a material fact or policy provision
  • Failure of attempting to reach a fair settlement of a claim in good faith
  • Failure to provide a reasonable explanation for the denial of a claim
  • Failure to affirm or deny coverage within a reasonable time
  • Refusal to pay a claim without conducting investigation with respect to the claim 

Proving bad faith practices:

When searching for the right insurance policy it may seem difficult to identify bad faith practices; and if you believe your contract has been dishonored, it can be just as difficult to prove bad faith. To prove an insurer has failed to abide by their insurance policy contract, the insured policyholders must hold proof that:

  • There was no legitimate reason for delaying/denying insurance benefits under the insurance policy 
  • The insurance company had knowledge that they had no reasons to deny or delay the payment of the claim.

Contact us today

If you believe your contract has been dishonored by your insurance company, contact us today for a free claim review.