Bad Faith Insurance
Ever faithfully paid your insurance premiums every month and then, after filing a claim, found that your payment was unreasonably delayed, denied, or underpaid by your insurance carrier. If so, you have most likely been a victim of bad faith insurance, an increasingly common practice among insurance companies who find that it is often more profitable not to pay out on legitimate claims.
It is estimated that hundreds of thousands of people a year find themselves in what they feel is the helpless position of being denied payment or shortchanged on their rightful claim. Some insurance companies intentionally misinterpret policy language while others withhold or deny coverage for frivolous reasons, counting on the fact that the average citizen will accept their fate without defending themselves or pursuing their legal rights. So few people seek representation, in fact, that many insurance companies view bad faith as a sound economic strategy, even though it's illegal.
To prove this claim in court, the injured party need only show that the insurer failed to honor the contract and that it had no reason not to pay the claim requested. In looking at the actions of the insurer, courts look to what a reasonable insurer would do in a similar situation. If the claim is proved, the insurer can recover both the benefits of the insurance claims plus any expenditures incurred while litigating the claim.
Back to top