Insurance Bad Faith

Frequently Asked Questions about insurance bad faith

What should I do if I believe I have a claim under my coverage?
If you have fire, a flood, or other event which you believe is covered under your policy, you should immediately notify your insurance agent of the event, and also read your insurance policy, especially the sections that relate to the situation of your claim. It is very important hat document and keep records of all events related to the claim, and also document all notes and all contacts, especially of your communications, both written or verbal, with the insurer and anyone else involved, such as firefighting personnel, sheriffs, and other law enforcement entities.

Does it matter when I submit a claim?
Yes. It is critical that you submit your claim as soon as you can, as most state laws and most insurance policies require that claims be presented within a limited period after the loss. If you, the insured, wait too long, you lose the right to pursue benefits on a claim.

What should I do if my insurance company denies my claim and I believe that it is committing bad faith?
If after reviewing your insurance policy you feel you are in the right, you should collect all of your correspondence with your insurance company, both your communications to them, and theirs to you, and any other pertinent documentation, and make photocopies of these. Write a letter to the Director of Claims of your insurance carrier and send it certified mail. The letter should cite the provisions of the policy that apply to your situation, and show that the insurer's denial of claim benefits is unreasonable. You should also write the Commissioner of the Department of Insurance in your state and ask the Department for a review of your situation and assistance in resolving your claim.

How do I find the name of the Commissioner of Insurance for my state?
An online search engine or the yellow pages will give you the website or phone contact information for your state’s department of insurance.

If my insurance company continues to act in bad faith, what remedy do I have?
When an insurer commits bad faith, an insured can negotiate a resolution and an acceptable settlement with the company. Insurers are extremely skilled and aggressive in claims negotiation, and most insureds are not, so the settlement you are offered may fall short of what you feel is fair. If you cannot obtain a satisfactory settlement from your insurer, then you are left with two options: either accept a settlement you feel is unfair, or consult an experienced insurance bad faith attorney.

How can an insurance bad faith attorney help me?
Insurance bad faith is a very specialized area of law. You will need to find an insurance attorney who is experienced in bad faith work. From a consultation on your case, and a review of your policy, an insurance attorney can determine whether your coverage applies for your loss, and whether or not your Insurer has committed bad faith. An insurance bad faith attorney can help you understand your prospects for securing a better settlement.

Do I need an attorney?
When an insurance company learns that an experienced bad faith attorney is involved in the case, the company is likely to treat your claim with much more interest. A bad faith attorney’s involvement will frequently cause the insurer reverse its earlier bad faith actions in order to resolve the claim, and reduce the potential bad faith implications and loss and punitive damages against the Insurer.
On the other hand, the insurer may dig in its heels as it realizes that it now must justify its previous bad faith actions.
Even when it is necessary for an attorney to initiate a suit for bad faith against the insurer, the case is often settled before going to trial.

Are there situations in which insurers have the right to deny a claim?
Insurers have the right to deny a claim when the insured has not lived up to the insurance contract, when the claim is not covered by the policy, and when the claim is fraudulent.