Most people rely on insurance companies to protect them. Their vehicle, their home, their business and their livelihood may be on the line, and they expect that their insurance policy will give them the support they need in difficult times. However, if a company puts their profits above their promises, they may act in bad faith to avoid paying policyholders what they are DUE.
What is an insurance company’s duty to you as a customer?
When a person takes an insurance policy, the company has several duties to those policyholders. These include:
- Properly investigating a claim and the circumstances that contributed to the reported damage
- Defending you against a claim
- Settling your claims reasonably within the terms of your policy
- Compensating you for your losses
In cases where a company does not fulfill this duty, policyholders may be able to sue for bad faith.
Failure to do this duty amounts to bad faith.
If your insurance company has withheld payments from you, refused your claim for reasons that are not justified by the policy or otherwise failed to do their duty, this may be considered bad faith. Some common bad faith practices include:
- Trying to settle for significantly less than a claim is worth
- Failing to investigate a claim
- Delaying the investigation or payment of a claim
- Requiring additional paperwork that is not listed in the policy documentation
Each of these forms of bad faith on the part of your insurance company could be cause for a lawsuit. If you and your attorney can show that an insurance company deliberately failed to do its duty, you could be eligible for the financial support you need to recover and additional damages for the harm that this bad faith has done.