When you purchase insurance to protect yourself and pay your premiums every month faithfully, you expect your insurance company to fulfill their end of the bargain and pay your claim promptly. Unfortunately, this does not always happen, and many people go through months or longer of frustration trying to negotiate a fair settlement. However, with the help of an experienced insurance dispute attorney, you may not only be able to get paid what you deserved, but also may entitled to additional damages.
What Are Common Types of Insurance Coverages Where Disputes Can Arise?
Consumers and businesses buy many different types of insurance to protect themselves from various liabilities they could face or losses they may incur. Some types of insurance coverages where a dispute could arise between the insured and his insurance company include:
- Homeowners and business owner liability policies
- Disability insurance policies—both long-term and short-term
- Health insurance policies
- Automobile insurance policies
- Life insurance policies
What Are the Basic Obligations of Insurance Companies?
Insurance companies have certain basic responsibilities to the people and businesses that they insure through an insurance policy. The insurance policy is a legal contract between its insured individual and business and the company. If the insurance company violates the terms of the contract, it could be liable for damages for breaching the contract. Some basic duties an insurance company has under an insurance policy include:
- Duty to defend. An insurance company has a duty to defend the policyholder when a third party files a claim for compensation. This includes hiring and paying for an attorney and the costs associated with litigation.
- Duty to indemnify. The duty to indemnify means that the insurance company is responsible for paying a loss to a third party that you would owe up to the policy limits under your insurance policy. For example, if your negligence caused a car accident, your insurance company would be obligated to indemnify you and pay the victim’s claim for compensation.
- Duty of good faith. An insurance company has a duty under its policy to act in good faith and deal fairly when a person files a claim. Whether its insured or a third party is filing the claim, the insurance company must promptly investigate and pay the benefits provided under the insurance policy if the claim is legitimate.
- Duty to disclose conflicts. Sometimes there are conflicts between the insurance company’s and its insured’s interests. For example, if the insured faces liability over the insurance policy limits, he may be more interested in having the insurance company settle the claim, so he owes no additional money than the insurance company will pay. His insurance company could prefer to try to fight the claim. In these and other cases where there is a conflict of interest, the insurance company has a duty to disclose them to its insured.
What Is a Bad Faith Insurance Claim?
When your insurance company denies or reduces your insurance claim or otherwise fails to provide the benefits you are entitled to under the policy, you may have a breach of contract and a bad faith insurance claim against the company. A bad faith insurance claim is a claim that they failed to act in good faith and fair dealing. Common ways that your insurance company could act in bad faith include:
- The insurance company fails to defend you if you are sued.
- The insurance company does not follow the procedures in your insurance policy if there is a dispute regarding the amount of compensation you are owed.
- The insurance company denies your claim for compensation despite the fact that your claim is covered under your insurance policy.
- The insurance company takes an unreasonable amount of time to pay your claim.
- The insurance company pays you less than what you are owed under your policy.
- The insurance company cancels your policy for no legitimate reason.
- The insurance company fails to communicate with you regarding your claim.
- The insurance company fails to properly investigate your claim.
What to Do If You Believe That Your Insurance Company Is Acting in Bad Faith
If your insurance company is denying your claim, offering less than you are entitled to, or otherwise breaching the terms of your policy, you need the help of an experienced attorney to fight for the compensation you deserve. At Greenspun Shapiro PC, we will give you an honest evaluation of your claim, attempt to negotiate your claim to reduce the costs of litigation, and will aggressively pursue your claim through a civil lawsuit if that becomes necessary. Call our office today to schedule your free case evaluation.