Insurance companies are governed by a massive number of laws and codes that regulate how they should act and what they’re required to do. One of these requirements is to act in good faith, which essentially means to follow through on their promises as a policy distributor quickly and in the best interests of their policyholder. However, because insurance companies are in business to make money and paying out more money means reduced profit margins, they don’t always stick to this requirement.
Insurance bad faith is a serious problem in which companies choose to act in their own interests first at the expense of claimants to whom they have a financial responsibility. In a sense, this can be boiled down to actions or underhanded tactics that these companies employ to try and convince claimants and those whom they are financially liable for to accept lower settlements or even give up on their claim completely.
As someone depending on your claim for compensation after suffering significant damages, bad faith tactics can be devastating and cost you thousands of dollars or more out of your pocket. And to make matters worse, any type of insurance can be guilty of bad faith—homeowners, auto, injury, business, and much more!
Signs of Insurance Bad Faith
In order to take action against an insurance company acting in bad faith, it’s important that you have an experienced Waterbury attorney on your side who can fight for you and your rights. Insurance companies face serious consequences if they’re found guilty of acting in bad faith, and many will quickly abandon these tactics if they find out you’re working with legal counsel who is familiar with pursuing insurance bad faith cases.
But the bigger question is: when do you know you need an attorney? Here are four common signs of insurance bad faith that may indicate that you should speak with a legal representative about your case as soon as possible.
Unnecessary Paperwork Requests
Does it feel like the fourth or fifth time that you’ve had to fill out this same form and submit it to a different person (or perhaps even the same person)? This probably isn’t your insurance company being irresponsible—it’s more than likely a sign of bad faith on the part of the insurance company. Paperwork is a normal part of a claim, but excessive or unnecessary amounts of it is an unethical or underhanded tactic that companies sometimes employ to try and wear down claimants in hopes of getting them to accept a reduced settlement or even just give up on their claim.
Slow/Lack of Response
Does it seem to be excessively difficult to try and track down anyone who works at the insurance company you’re dealing with? Has the adjuster in charge of your claim seemingly vanished from the planet? Are you getting nothing but hollow promises of a call back that never seem to fulfil? This is also an attempt to try and make claimants become impatient about their claim and hopefully accept a reduced settlement just to get it over with.
Lowball Settlement Offers
After waiting and waiting you finally receive a settlement offer from your insurance company, only it’s lower than you initially had anticipated. Much lower. In fact, it’s barely enough to cover the cost of your time you’ve missed from work, let alone your medical bills after an injury or the lost income your business missed out on while waiting for facility repairs to complete. This is not a mistake by your insurance company. Lowball offers open negotiations about your claim with the insurance company on the front foot. Even though the claim will go up in value from there, the doubt that a lowball offer plants in your mind often has many people thinking their claim is worth way less than they thought and they take a much smaller final value than your claim is really worth.
Refusal to Pay
Finally, after a long investigation and negotiation process, you’ve come to an agreement and you’re simply waiting on the settlement check to arrive. Yet you’re stuck waiting. And waiting. And waiting. Even after you’ve agreed to a settlement, your insurance company may still refuse to cut you a check in hopes of lowering your settlement even further. This is a highly unethical way of trying to reduce expenses and keep profit margins higher.