How to Spot Insurance Company, Bad Faith

Common Examples Pointing to Insurer Misconduct

Insurance companies have considerable leeway to take advantage of policyholders when processing claims. However, certain actions cross the line into bad faith territory:

Unreasonable Claim Denials

Insurers may deny policyholder claims outright even when they reasonably qualify for payouts under the policy. For example, an auto insurer rejecting an accident repair claim for body damage visible in photos constitutes potential bad faith.

Refusing to Cover Owed Treatments

Health carriers act in possible bad faith by not covering therapies, medications, or procedures that policy documents explicitly indicate the insurer must pay for per the policyholder's plan. This forces unnecessary out-of-pocket costs.

Severely Underpaying Viable Claims

Insurers may admit a loss claim is valid but in bad faith severely lowball the payout amount well below what evidence suggests is fair. For example, offering just 20% of a proven home flood loss estimate fits this category.

Failing to Investigate Claims Properly

Insurers must apply due investigative diligence before denying claims. Rejecting based on assumption or flimsy reasoning without contacting police, physicians, contractors, etc. to authenticate details suggests bad faith.

Interpreting Ambiguous Language Deceptively

Where a policy's wording proves unclear regarding what is or is not covered, insurers must clarify or judge in the policyholder's favor. Leveraging ambiguity to deny or limit rightful claims shows bad faith.

Evidence Exposing Insurer Misconduct

Certain proof carries considerable weight in confirming improper claim handling:

• Claim correspondence records exposing delays, deception, and unreasonable stances.
• Independent claims handling expert testimony outlining where the insurer violated industry standards.
• Statements by company staff admitting questionable internal claim practices.

With supportive facts, policyholders have a strong basis for pursuing bad faith damages through litigation or settlement negotiations.