People who invest in car insurance firmly believe that they can peacefully drive on the road without worrying about any cost that comes with possible vehicular accidents and other road mishaps. Though this is one of the primary purposes of car insurance, there’s no denying that claiming money from insurance after an accident can be stressful. If you honestly believe that your insurance firm is negotiating your claim in bad faith, you need to talk to your lawyer to settle the matter as soon as possible.
You may be asking, ‘what is insurance bad faith?’ after being denied a legitimate insurance claim. Bad faith is defined as the wanton intent of the other party to cause damage or injury to another by denying a legitimate claim. In insurance contracts, the insurer and insured voluntarily forges an agreement wherein the former bind themselves to bargain in good faith with the latter, for the same to enjoy the benefits of the policy.
How is bad faith proven?
In an insurance contract, the insurer offers a policy that entitles the insured to a monetary claim should the circumstances stipulated in the contract arise. If these exceptional circumstances occur and the insured files a claim, but the insurer deliberately or negligently fails to reply to such a claim promptly, bad faith is presumed.
However, it is incumbent upon the insured to prove the existence of such a willful or negligent act. To do this, the policyholder must show the existence of a contractual obligation between them and the insurer. This could be proven by the policy they were awarded. After that, they should also document every effort they exerted to inform the insurer that one or all of the circumstances stipulated in the contract gave rise to the enforcement of their obligation.
If the insurer still fails to reply and acknowledge such a claim after a reasonable time, bad faith can be presumed. Reasonable time, in this case, translates to a considerable time given to the other party to respond to the claim.
For example, the insurer only replied after three working days before the claim was submitted. Bad faith could not be presumed here because it’s reasonable to believe that it would take a few days before the company can get back to specific clients considering the number of claims they settlein a day.
What’s unreasonable, however, is that after two to three weeks and after a barrage of calls to the agent, they still refuse to honor the insured’s claim. Here, it can be presumed that they’re deliberately evading liability by not answering back.
What are other insurance tactics that show bad faith?
Aside from the circumstances mentioned above, here are other clear examples of how insurance companies commit bad faith in dealing with their policyholders.
Denying a legitimate claim without sufficient explanation
The insurance company should always provide a clear and convincing reason every time they deny an insurance claim. If, after an accident, you filed a claim and they deny it outrightly without a word, you can file an action to enforce the insurance contract or nullify your policy and pay you for damages.
Dismissing or deciding a claim without investigating
It’s customary that the insurance firm conducts a thorough investigation to justify or nullify an insurance claim. If they deny or approve an insurance claim without conducting a proper investigation, they can be charged for insurance fraud. They owe it to their policyholder to be truthful and ethical in the way they hold their claim verification process.
Withholding or delaying payment of a valid claim
For example, the insurer already conducted an investigation, you submitted all the paperwork, and they prove that your claim is valid. Still, they let you wait for a long time to release your benefits. This practice is both unethical and illegal. It could also be a ground for filing damages arising from the nonfeasance of one of the parties.
Refusing to pay the insurance claim
If everything is in order and you prove that your claim is valid, but the company refuses to pay, that act is tainted with bad faith.
If you find yourself in any of the situations mentioned above, one of your remedies is filing a case to enforce the insurance contract and force the insurer to pay up. Besides that, you can also file an action to nullify or invalidate the agreement on the grounds of fraud arising from bad faith. In either case, you need a lawyer to help you enforce your rights and ask for damages.