Insurance Bad Faith Claims: What You Need to Know About These Complex Cases
Insurance is one of the things you don’t think about until you need it. You pay your bills every month, take a glance at your declarations page when you get your renewal notice, and go on with your day. But what happens when your insurance isn’t there when you need it?
Nationwide, around 5 to 6 percent of insured homes have claims made on them every year. And about 4.5 percent of drivers file an auto insurance claim every year. But some of these people may be faced with insurance companies that deny legitimate claims or treat them unfairly in their time of need. When this happens, you need an experienced attorney by your side.
Examples of Insurance Bad Faith Claims
When an insurance company doesn’t act in accordance with your contract terms, it’s referred to as acting in bad faith. Some examples of when a bad faith insurance dispute may apply include:
- Denying a claim for no reason. Your insurance company must provide a reason for why a claim is rejected. In some cases, the insurance company denies a legitimate claim hoping that the person won’t attempt to appeal or fight the denial, which saves the company money
- Not acting with due diligence and care. Insurance companies have the responsibility to ensure that all claims are thoroughly investigated and addressed. An insurance adjuster who cuts corners or otherwise treats your claim unfairly may be acting in bad faith
- Delaying the payout in the hopes that the policyholder gives up on ever getting the money. California law requires insurance companies to make a decision on whether to accept or reject a claim within 40 days
There are other circumstances that may warrant a bad faith claim. If you have questions about what qualifies or the process of pursuing legal action, call our office to speak with an attorney.
Potential Hurdles to Overcome When Dealing With Insurance Bad Faith Claims
Insurance bad faith claims are complex by nature, and policyholders need the experience and knowledge of an attorney to help them navigate the process. Below are some of the potential challenges you could face when filing a bad faith claim against your insurance company.
Proving the Elements of a Bad Faith Claim
The law requires that policyholders be able to prove specific elements to win a bad faith claim against an insurance company. These include that there was a binding relationship between the insured and the insurance company. This requires that the policy be up to date on payments and that no other actions have occurred that would render it void.
You must also be able to prove that the insurance company acted in bad faith. The truth is that claims are sometimes denied. The simple act of denial isn’t enough to file a bad faith claim. You must be able to show that the insurance company was negligent or willfully tried to avoid paying a valid claim by denying it for false reasons or delaying the process with ill intent.
Navigating Ambiguous Language in the Policy’s Terms and Conditions
The contract between the insurance company and the policyholder is the basis for the relationship. Other important documents include the declarations page, definitions and exclusions, and terms and conditions. However, these documents are often purposefully written with confusing, vague, or ambiguous language to make it easier for the insurance company to avoid paying out a claim. An attorney can go through your contracts and documents to understand exactly what the insurance company is legally bound by.
Complicated Negotiation Discussions
Most civil cases, including insurance bad faith claims, are settled out of court. These negotiations can require quite a bit of back and forth, and it can take months to come to a resolution that both parties find acceptable. Your attorney is an invaluable resource during this time, ensuring that you understand what a fair settlement offer should look like and playing a direct role in the negotiations themselves.
Financial and Emotional Stressors
It’s already a stressful time when you have to make an insurance claim. Dealing with a company that is acting in bad faith makes this even worse. While you’re pursuing your claim, you still have to deal with the stress of the original circumstances, such as damage to your roof or a water leak, and potentially have to pay for repairs or spend money on alternative housing while you wait for the claim to be settled. All of this creates a high-stress situation that can make it hard to navigate your day-to-day responsibilities with work and family. Prioritizing your mental health is important during this difficult time.
Working With an Experienced Attorney
The truth is that the insurance companies have near-unlimited budgets and in-house legal teams, which means they can delay and draw out claims and cases until you’re exhausted and ready to give up. You need an attorney who has experience with insurance bad faith claims and is ready and able to fight back.
When you work with the team at Geonetta & Frucht, LLP, you can be confident that you have attorneys who understand your rights and how the insurance system is supposed to work and who are able to hold insurance companies accountable. If you’re having issues with your insurance company or think you may have grounds for a bad faith claim, call 415-237-1212 to get more information on your legal options in California.
