Most people pay good amount of money in insuring themselves, their health, life, business, home, car and others by buying insurance policies to protect them. When the time comes that filing a claim is needed, insurers should treat fairly their policyholders and compensate them accordingly. This kind of treatment is known as good faith while the opposite is called bad faith.
The latter happens when companies fail to care properly for their policyholders and their part of the deal is not upheld. If you think your insurers are doing this deliberately to you, then you can go into court and file them a case with the help of a Bad Faith insurance expert. This type of witnesses have the required expertise in the industry to give their professional opinion.
Insurance companies are still a business so they would do their best to protect and save as much money as possible. But doing this to their policyholders at their expense is not acceptable and is considered unethical. Similar with other businesses, they must follow laws specific to their industry and pertains to the line of work that they have.
These laws include those which address the issues of their consumers and the actions that company employees, brokers or agents of theirs do. The rules are meant to provide balance between them and an individual consumer. There are those that pertains to the content, sale, rate, underwriting and claims payments, though mistakes still happen even if they were highly regulated.
Some mistakes are honest ones and were made without any malicious intentions on the part of the insurance companies. But there are those that take advantage of their consumers and engage in business practices that are unethical. An attorney could usually help in identifying if the mistake was honestly made or were intentional ones.
It is difficult for the insured to determine or know sometimes if they were treated by the insurers fairly or if the claim was denied wrongfully. That is why getting a legal consult is important to let the facts be examined by an attorney and advise you on what to do. Filing of lawsuits usually involves contract being breached by denying the consumer wrongfully of a legitimate claim.
If the company acts with bad faith and does not pay intentionally a legitimate claim rather than just making an honest mistake, they could be subjected to punitive damaged. This serve only not to compensate for a specific loss the insured but punish and deter the bad behavior of the insurer as well. Doing this encourages practicing of fair business.
Here are some examples to help you determine if they were acting in bad faith like their failure of affirming or denying claim coverage. They are supposed to do these with a reasonable cause or within acceptable time upon filing of your claims. Another is settling them in a much lesser amount than is justifiable.
Other examples include delaying of claims like requesting for unnecessary paperwork and reports. Their failure in notifying the insured of their decision in paying the coverage. And making of settlement without informing the insured.