Although insurance companies are expected to act as fiduciaries to their customers when handling a claim, they may not always act in good faith. Insurance companies may be motivated by profits while investigating a claim. As an insured entity, it is vital to be aware of ways an insurance company may be circumventing its contractual obligations under the insurance contract. The following tactics are the most common ways for insurance companies to favor profits over their fiduciary duty to their customers.
Refusing to cover for the claim. An insurance company should not refuse a claim that is covered by the policy. When a valid claim is denied, it is in bad faith.
Delaying claim handling. An insurance company should respond to a claim within a certain time limit. Usually the time limit is between 15 to 60 days of a claim.
When the insurance company does not respond or delays claim handling, it is acting in bad faith. Often, insurance companies do this in the hopes that the claimant will abandon the claim so that the company does not have to pay for coverage to save money.
Delaying payment of a claim. Insurance companies have a duty to make timely payments. If the insurance company is delaying payment of a valid claim, it is acting in bad faith.
Lowball offer. Insurance companies often offer less money than the claim is worth. When insurance companies intentionally lowball an offer and do not provide the entire worth of the claim, they are acting in bad faith.
Misrepresentation of policy terms. Insurance companies should not misrepresent what is covered in the policy. Insurance companies also have a duty to be truthful and cover all valid claims.
Disclosure of documents. Insurance companies cannot unreasonably deny requests for documents that support their denials. Insurance companies have a duty to disclose. They should never deny requests for copies of insurance policies or supporting documents for their denial of coverage.
Failure to investigate. Insurance companies must promptly investigate a claim. Failure to investigate a claim is also considered bad faith.
Failure to provide a basis for denial. Insurance companies may not simply deny a claim. They have to demonstrate a reason for their denial and offer supporting evidence and basis for it. A blanket denial without any reason is an indication that the insurance company is acting in bad faith.
Failure to notify. Insurance companies should not deceive their customers by not disclosing claim filing deadlines.
Use of threatening language. Insurance companies should not intimidate or threaten a policy holder from making an insurance claim.
Improper cancellation. Insurance companies are only permitted to cancel policies during the policy term for very specific reasons. A midterm cancellation can be bad faith.
If you believe your claim was handled in bad faith, a Pittsburgh bad faith insurance lawyer at AlpernSchubert P.C. can help. We will analyze your insurance policy to determine if your claims were denied in bad faith. Do not settle for a lowball offer by your insurer or accept a denial at face value. Call us at 412-765-1888 or contact us online for a free consultation today. Located in Pittsburgh, we serve clients throughout Allegheny County, Lawrence County, Washington County, and western Pennsylvania.