Bad Faith In A Homeowners’ Insurance Claim
We buy insurance for our home for one main reason: to protect it. We pay a lot of money for this peace of mind, so when our home gets damaged by a fire, flood, earthquakes, theft, or other issues, we expect that our homeowners’ insurance company will assess the situation and pay us promptly per the terms of the agreement.
Unfortunately, this does not always happen. It is not uncommon for insurance companies to make lowball offers, delay payment, or refuse to pay at all. Like all companies, they are in the business of making money and when they pay out claims, they lose money.
However, that does not give your insurance company a good reason to deny a valid claim. This is called bad faith and it is against the law. Bad faith can happen with any type of insurance and while it is acceptable for an insurer to deny a claim, there must be a valid reason to do so. If you are a victim, be sure to contact a lawyer to get your claim paid.
Types of Bad Faith
There are several ways in which an insurance company can engage in bad faith:
- Denying a claim for no valid reason. If your claim is denied, there needs to be a reason why.
- If the insurance company offers you much less than your claim is worth, this is called lowballing, and it’s a common bad faith tactic.
- Delaying payment. If an insurance company approves a claim, it should pay out promptly. It is unacceptable to make a client wait several months for a check.
- Refusal to pay. There are situations in which insurance companies refuse to pay valid claims altogether. This is a breach of contract, which is illegal.
- Improper investigation. There are various steps involved in a complete investigation. If your insurance company refuses to perform the investigation properly, it could be bad faith.
- Making threatening statements. An insurance representative should never threaten clients or make accusations. If you are submitting an insurance claim due to a fire, for example, you should not be accused of arson.
- Misrepresentation of the policy. Insurance companies should be truthful and abide by their policies. Lies and misrepresentation of policy language is considered bad faith.
Comply With Your Obligations
As the insured, you should also ensure you are doing what is required to get your claim paid. For example, you may be required to report the incident within a certain time period, keep accurate records of expenses, and show the estimator the damage caused to the home. Refusal to do so could cause your claim to be denied.
Seek Legal Help
It can be frustrating when an insurance company refuses to pay a valid claim. Don’t let your insurer get away with this behavior.
Fort Lauderdale homeowners’ insurance lawyer Edward J. Jennings, P.A. can protect you from bad faith. We will work hard to ensure your claim is fairly assessed and paid. To schedule a consultation, call 954-764-4330 or fill out the online form.
Resource:
investopedia.com/terms/b/bad-faith-insurance.asp
