Insurance policies are legal agreements between an insurer and the insured that are intended to provide financial protection against specified risks. Unfortunately, there are instances where insurance companies act in bad faith, prioritizing their own interests over those of policyholders.
Also known as bad faith insurance, this kind of conduct can leave policyholders in a vulnerable position. Recognizing signs of bad faith insurance is crucial for policyholders who want to protect their rights and ensure that they receive the benefits they are entitled to. Some of the red flag indicators that an insurer may be attempting to renege on its obligation include the following.
Lack of transparency and communication
What could start as a simple lack of clear communication or transparency regarding policy terms and coverage details can often escalate into a larger issue. Policyholders may find it difficult to get straightforward answers from their insurance company regarding their coverage, claims process or policy changes. Delays in responding to inquiries or providing necessary information can be indicative of bad faith practices, as insurers may be intentionally trying to frustrate policyholders or deter them from pursuing legitimate claims.
Unreasonable delays or denials of claims
One of the most blatant signs of bad faith insurance is the unjustified delay or outright denial of legitimate claims. Insurance companies are obligated to handle claims promptly and fairly, yet they may engage in tactics such as repeatedly requesting unnecessary documentation, conducting lengthy investigations without justification or arbitrarily denying claims without proper evaluation. Denying claims without investigations may also point to bad faith insurance.
Unreasonable settlements and intimidation
insurance companies may offer unreasonably low settlement amounts or use intimidation tactics to coerce policyholders into accepting less than what they are entitled to under their policy. This can include threats of legal action, aggressive negotiation tactics or attempts to discredit the validity of the claim.
If you suspect that your insurer is reneging on its obligations, consider taking steps to help protect your rights and to better ensure that you receive fair treatment. Seeking personalized legal guidance is a good way to get started.