Unfortunately, insurance companies often have the upper hand when it comes to settling a claim. Big insurance companies generally have superior expertise, financial resources, and negotiating strength in comparison to an injured individual, or a person who has had their home destroyed. Because of the disparity between an individual and an insurance company, most courts require an obligation of good faith and fair dealings on the part of insurance companies. So, what is bad faith in insurance? If your insurance company fails to act in a reasonable manner when processing, investigating, or paying your claim, you may have the right to file a lawsuit citing bad faith on the part of your insurer.
Each state has its own definition of bad faith, with some defining bad faith dealings as those that are unreasonable or without proper cause, while other states take a narrower view. The state of Louisiana defines bad faith actions as those that are arbitrary, capricious, or without probable cause. This means if an insurance company unreasonably delays or denies the settlement of a valid claim, the company may be guilty of bad faith. In Louisiana, bad faith on the part of an insurance company is considered a tort action, rather than a breach of contract. The cause of action for a bad- faith lawsuit must be filed within one year as it is subject to the one-year statute of limitations in the state.
When your insurance company is failing to pay a legitimate claim, the attorneys at Gulf Coast Insurance Attorneys do not want you to have to ask, “What is bad faith in insurance?” We will handle a claim of bad faith on your behalf, from start to finish, ensuring you never have to worry about a recalcitrant insurance company. When you are facing an insurance dispute or denial, you need a strong advocate in your corner. You need New Orleans legal to step up and go toe-to-toe with the insurance company, demanding it follows through with the promises made to you.
What are Common Issues of Bad Faith Among Insurers?
Insurance companies are expected to uphold their policies by treating their claimants honestly and fairly, yet many companies unreasonably deny a claim or pay less than it’s worth. If an insurer behaves in an unethical manner, it can be held liable for bad faith. Since insurance companies are primarily interested in their financial bottom line, they often try to limit what they payout for insurance claims, even when the claim is valid. To ensure insurance companies do not take advantage of claimants, Louisiana has two bad-faith insurance laws that detail how companies must handle claims and the penalties they could face if they fail to handle a claim fairly. Louisiana Revised Statute Section 22:1973, holds insurance companies accountable for their actions, legally requiring them to deal fairly with those they insure.
What Are Some Examples of an Insurance Company Acting in Bad Faith?
Below are some examples of an insurance company acting in bad faith:
- Failing to give a valid reason for denying a claim—you are always entitled to a valid reason when your claim is denied.
- Offering less money than a claim is worth—lowball offers are a form of bad faith on the part of the insurance company.
- Neglecting to conduct a quick, thorough investigation once a claim is received—by law, the insurance company is required to investigate your claim quickly and thoroughly.
- Ignoring or flat-out refusing requests for documentation—when you ask your insurance company for documentation that supports a negative decision, they are legally obliged to provide that documentation.
- Putting a hold on valid claim payments or refusing to pay a valid claim—your insurance company has a responsibility to pay all valid claims, promptly and completely.
- Placing company profits over a valid claim—even though insurance companies are concerned about profits, they are not allowed to place profits over your valid claim.
- Constantly delaying or denying decisions on a claim or requests for medical treatment approval—Time really is of the essence when it comes to approvals for medical treatments you need for your injuries. When a claim is consistently delayed or denied, you may not get the medical treatments you need and deserve.
- Misrepresentations of the law or policy language—deliberate or intentional misrepresentation of the law or the language in your insurance policy are not legal and are an instance of bad faith on the part of the insurance company.
- Making threatening statements to policyholders—your insurance company is not allowed to threaten policyholders. If you have been threatened by an insurance company do not wait—contact an attorney experienced in proving bad faith insurance practices.
What Types of Insurance Companies Typically Engage in Bad Faith Practices?
Virtually any type of insurance company can potentially engage in bad faith practices. A health insurance company can refuse to pay for a valid medical procedure. An insurance company that insures homes can be guilty of bad faith when they refuse to pay a claim, citing a reason that is not entirely reasonable or valid. A car accident insurer could refuse to pay reasonable damages to repair a vehicle or to pay for the injuries suffered by those involved in the car accident. Even a life insurance company can engage in bad faith by refusing to pay out a life insurance policy even though the death should be covered under the policy.
Can You Sue an Insurance Company for Acting in Bad Faith?
When you purchase an insurance policy, you are purchasing peace of mind in the form of protection in the event the “unthinkable” happens. If an insurer deliberately denies a claim for no good reason, or without properly conducting a timely investigation, you may be able to pursue a bad faith action. No matter what form insurance bad faith takes, it can cause huge problems for you. What you need to know is that you do not have to accept the unreasonable actions of the insurance company you trusted to pay your legitimate claim. Prior to making the decision to sue your insurance company, make sure you review your insurance contract to make sure the company is not honoring its commitments. Fully documenting your claim denial is extremely important, as is finding the right attorney to handle your bad faith insurance claim.
How an Attorney Experienced Bad Faith Insurance Claims from Gulf Coast Insurance Attorneys Can Help
At Gulf Coast Insurance Attorneys, we help people—people who are in need, who are feeling overwhelmed, or who are injured and do not know where to turn. It’s important that you know you do not have to come to us with money in hand, you simply have to have a problem we can solve. We will finance your claim, helping you to get back on your feet. If you are hitting a brick wall when dealing with your insurance company and you believe they are exhibiting bad faith, we can help. Contact the experienced bad faith insurance claim attorneys from Gulf Coast Insurance Attorneys.