Insurance companies have an obligation to their policyholders to act in good faith when investigating or handling a claim. A company that fails to uphold its obligation can be said to be acting in bad faith. When this happens, it often means policyholders will be wrongfully denied coverage, forced to pay costly medical bills or repairs out-of-pocket, and left struggling to survive without the compensation they should have received under the terms of their policy.
Fortunately, Title 42, Subchapter G, Section 8371 in Pennsylvania’s statutory bad faith law prohibits such unethical behavior on the part of insurance companies. It also allows victims of bad faith insurance practices to pursue interest on unpaid claim settlements, seek punitive damages and ask for attorney fees and court costs.
Bad Faith Practice Warning Signs
If you have recently filed a claim, and your insurance company has either been giving you the run-around or has offered a settlement that is far less than what is owed, you may be the victim of bad faith insurance practices.
Top 10 Signs Your Insurance Company Is Acting In Bad Faith:
- Unexplained or unjustified delay of investigation: Insurance companies are required to investigate claims in a timely fashion. When insurers procrastinate or have no valid and justifiable reason for delaying an investigation, it can have a negative and costly impact on you as the insured party.
- Making unreasonable demands for documentation: One of the ways insurance companies may attempt to delay paying out on a claim is to make unreasonable demands on the insured for documentation and evidence. Continual requests for more documentation and paperwork could be sign your insurer is attempting to delay your investigation or even find a method by which they could deny coverage.
- Insurer is too quick to make a settlement offer: When an insurer is too quick to make a settlement offer, this is not a good sign. Yes, you want your case resolved quickly, however a rush settlement offer will often be for far less than you are rightfully owed. If your insurer can get you to agree to a lower settlement, it can save the insurance company a lot of time and money. This is why you should never accept a settlement offer or sign any documentation from your insurer prior to speaking with a skilled attorney.
- Insurer attempts to pressure or bully you into accepting an unfair settlement offer: When initial attempts fail, insurers may try to pressure or bully you into accepting an unfair settlement offer. An insurer may tell you what is being offered is the best you can expect to get, or your policy doesn’t cover any additional expenses. Seek legal representation to help you uncover the truth and pursue the full value of your claim.
- Lack of communication: insurance companies who are not in frequent contact with policyholders following the filing of claims generally have something of which they are trying to hide. Failing to respond to your correspondence, acknowledge receipt of documentation and evidence, or follow up with investigatory actions could be a sign of a more serious problem.
- Conflict of interest: If your insurance company is handling both your claim and the claim of the other interested party, it could mean a conflict of interest affecting your rights and ability to seek the maximum compensation for your injuries and losses.
- Changes made to policy without prior notification: In some cases, an insurer may attempt to make changes to an insured’s policy without prior notification in an effort to deny coverage or limit the compensation the insured is eligible to pursue. Keeping a copy of the insurance policy you signed and to which the insurance company is to base a payout to an insured can help prevent this from happening.
- Insurer looking for reasons to deny coverage: When an insurer fails to acknowledge receipt of evidence you have submitted for medical expenses, car repairs and other costs related to injury or losses covered under the terms of your insurance, it could be a sign the insurer is looking for a way to deny coverage. Insurers are not supposed to figure out how to deny coverage. Insurers are required to investigate and pay compensation on valid claims, and in a timely fashion.
- Failure to pay out on valid claim: Insurance companies do not make money by paying out on claims. If an insurer can find a way to avoid paying out on a valid claim, you can expect that the company will do so. Some insurers deny coverage in the hopes the insured will simply accept the denial and move on. If you have been denied coverage, you have the right to challenge the denial and fight to get a fair settlement according to policy terms.
- Policy cancellation: One of the most underhanded tricks insurance companies will play is to cancel an individual’s policy without due cause. Filing a claim is not grounds for cancellation. If your insurer has breached its contractual obligations and has attempted to cancel your policy for no valid reason, seek legal representation at once. A lawyer can help you fight to defend your rights and protect your interests.
Why You Need Legal Representation
Insurance is big business. When an individual is faced with adversity from his or her insurance provider after submitting a claim, it can be daunting. Insurance companies may use scare tactics and sheer intimidation to get an insured to agree to accept a lesser settlement, so as to avoid having to pay out on the full value of a claim. These are big businesses, fully staffed with defense lawyers and adjusters who have the task of reducing settlement payouts. Waste no time in retaining legal counsel.
An experienced lawyer can thoroughly investigate instances of bad faith insurance practice, help you gather the necessary evidence and documentation to prove your claim, and help you fight for the compensation, as is your right. Hiring a qualified and experienced Philadelphia insurance bad faith lawyer can significantly improve the possibility of maximizing the value of your claim.
- Pennsylvania General Assembly: Title 42, Subchapter G Special Damages, Section 8371. Actions on insurance policies