Individuals and businesses invest in insurance policies to protect against both liability and risk. There is insurance to reduce liability while driving, for example, and also insurance to help business owners cover operating expenses if they have to suddenly close for reasons outside their control.
Every type of insurance is subject to both Pennsylvania state and federal regulations. The insurance company typically has to fulfill its obligations as outlined in the policy documents when the policyholder suffers a covered loss.
They should not operate in bad faith, which means entering into an agreement they do not intend to uphold. Unfortunately, not every person filing an insurance claim quickly gets the coverage that they deserve, as bad faith insurance practices are more common than you might expect.
Insurance companies sometimes deny valid claims
Paying out on any sizable claim generally means that an insurance company will take a loss. There is some tension in the relationship between a policyholder making a claim and the insurance company that they have paid for protection for years.
While the individual may trust the company, the business wants to minimize what it pays to maximize profits. Bad faith insurance practices seek to deny someone the coverage that they deserve based on their policy.
Those confused about why the insurance company denied their claim and worried about how they will cover their losses may need help reviewing their policy documents. Getting legal guidance can help someone affirm that their coverage should apply to the situation and may help them determine how to move forward with a claim against the company if they will not resolve the matter amicably.