When to File a Bad Faith Insurance Claim

You buy insurance for those times when something goes wrong—a fire or other natural disaster that damages your home or business, a disability that prevents you from working, or an auto accident that leaves you responsible for damage to another’s property. You’ve dutifully paid insurance premiums for years to maintain coverage and now, when you need it most, the insurance company is making excuses about why it can’t pay your claim.

Bad faith insurance is an umbrella term for an insurance company’s failure to treat you fairly and honestly. Insurance companies that act in bad faith are not only behaving unethically—they’re also potentially breaking the law. 

If you’re having a dispute with your insurance company, you might be able to file a bad faith insurance claim. Morgan & Morgan helps policyholders settle insurance claim disputes in a wide range of practice areas. Let us review your claim for free.

What Is Bad Faith Insurance?

An insurance policy is a type of contract between you and the insurance company. Under a contract, each party has duties. Your main duty, as an insurance policyholder, is to pay the agreed-upon premiums when they are due. And the insurance company has a duty to pay legitimate claims in a timely manner.

In general, every type of contract, including insurance contracts, also contain an implied duty of good faith and fair dealing. While this duty does not have a specific definition, the basic premise is that each party to a contract has a duty to not act in a way that infringes on the right of the other party to receive the benefits of the contract. When they fail in this duty, they are acting in bad faith.

A denied insurance claim does not necessarily mean that the insurer is acting in bad faith. It could simply be a breach of contract. The two are not mutually exclusive, though. Upon further investigation, some contract breaches result in a bad faith insurance claim. 

Not sure what type of claim you have? Confused by insurance company language? Morgan & Morgan can cut through the chatter. With one call, the largest plaintiffs’ law firm in the country will take a look at your case and clearly explain your options.LEARN MORE.

When to Talk to a Lawyer

Insurance companies act in bad faith for one simple reason: to increase their profits. Every claim they deny or minimize increases their bottom line. In fact, some insurers are notorious for giving their policyholders the runaround. Treating policyholders unfairly is, actually, part of their business model.

If the insurance company isn’t treating you fairly and honestly, it might be time to talk to an insurance dispute attorney. Specific actions by the insurance company that may warrant a call to Morgan & Morgan include:

• Failure to investigate a claim
• Inadequate investigation of a claim
• Failure to respond to the policyholder’s requests
• Failure to handle, process, or resolve a claim in a reasonable time frame
• Making an unreasonable settlement offer
• Making arbitrary or unreasonable demands regarding proof of loss
• Delaying or denying a claim without justification
• Refusing to acknowledge your claim altogether
• Failure to implement reasonable standards for investigating and processing claims
• Refusal to defend the insured against a lawsuit
• Denying a claim, or part of it, without explanation

Since the covenant of good faith and fair dealing is implied (not expressed) in insurance contracts, some actions may be considered bad faith regardless of the policy language. In other cases, allegations of bad faith may come down to what is actually in the policy.

Get Morgan & Morgan on Your Side

The insurance company might offer to provide a public adjuster at no charge to help resolve your dispute. However, adjusters have limits. A public adjuster cannot file a breach of contract or bad faith lawsuit on your behalf.

In our experience, taking legal action is sometimes the only way to get the insurance company to do right by a policyholder. Morgan & Morgan has decades of experience winning insurance company disputes. Insurance companies fear and respect our strength. With Morgan & Morgan on your side, you have an entire team of insurance recovery attorneys dedicated to your case. Call 877 357 3092 or Contact Us for your free consultation.