What is a Bad Faith Insurance Claim?
Article by Susan Slobac
Immediately upon entering into a contract with its policyholder, an insurance company automatically has the responsibility to act fairly and in “good faith” toward its policyholders. When an insurance company doesn’t act in accordance with these moral standards, that’s when a bad faith insurance claim comes into the picture. Basically, what this means in simple terms is that if an insurance company enters into a contract with a policyholder, but has no intentions of living up to that contract or is being sneaky about representing the contract being sold to the policyholder, this is in “bad faith” and will likely result in a bad faith insurance claim once the policyholder becomes aware of the injustice.
But what exactly is insurance bad faith? What is the “norm” for what an insurance company is responsible for? The moral duties of an insurance company first depend on whether the relationship of the person making the bad faith claim is “first party” (the person’s own insurance company) or “third party” (the insurance company of someone else.) Insurance companies are expected to act in a way that is honest, fair, and in good intentions at all times.
Unjust insurance claim denial and failure to properly investigate a claim are both common instances of insurance bad faith. Other examples are purposely delaying payment for an unreasonable amount of time, refusing to settle a case, failure to reimburse for the entirety of a loss, misrepresenting or failure to translate the jargon written for the policy, and so on. There are many ways that insurance companies try to sidestep liability in cases that seem very clear cut to most reasonable people.
Anything that isn’t straight forward, clearly defined, or something that is just plain “shady” by the insurance company is in bad faith. Policyholders can sue for a tort claim as well as breach of contract if they feel their rights have been violated by an insurance company (theirs or someone else’s).
In these cases where insurance companies don’t adequately and fairly live up to the promises of what is clearly stated and agreed upon in the policy, a Denver injury lawyer will come in handy. The most common reason that a Denver injury lawyer will become involved in a bad faith insurance claim is for unfair or inadequate investigation after something such as an auto accident or after an unfair insurance claim denial.
Insurance companies attempt to get away with a lot these days. Don’t let them. Bad faith claims are your defense against immoral and erratic behavior by insurance companies. The right injury lawyer here in the Denver area to represent your valid claim is the first step toward not being the door mat of your insurance company.