Before delving into bad faith insurance claims, it’s essential to first learn the meaning of the associated keywords used herein to better your understanding. These are:
- Insurer- This is the party responsible for providing compensation and payment. They’re often referred to as insurance companies.
- Insured- This refers to the party seeking protection and compensation from the insurance company.
- Compensation – This is the amount payable to the insured by the insurer, should the insured risk take place.
- Claim – This pertains to the application an insured makes to the insurer seeking compensation.
- Claim adjuster – This refers to a professional whose work is to investigate claims you file and determine their legibility. Either party, insured or insurer, can seek such services.
Insurance cover aims to safeguard you from certain events through compensation. You can take many insurance covers, enveloping various issues, such as health, accidents, and pricey possessions, like jewellery. In the event your insured risk occurs, your insurance company should compensate you based on the policy agreement you have with them.
However, some companies might not compensate you or might act in bad faith as they serve you. In most states, there are protection laws that aim to safeguard the rights of the insured from the insurance company. These laws also dictate the behaviour of insurance companies as you work together; if they failed to follow such laws, you can sue them.
In this case, there’s a specific claim meant for insurance companies, and it’s known as a bad faith insurance claim. By definition, a bad faith insurance claim is when your insurance company aims not to fulfil its obligation to you, especially in issuing compensations. You can file this claim to prove that your insurance company acted in bad faith as they served you.
For a bad faith insurance claim to suffice in court, it needs to have certain elements, which this article will discuss in detail. However, it’s good to point out that your claim doesn’t have to include all of them; you only need to include those relating to your specific cause.
That said, it’s time to indulge in this article’s business. Here are the elements to include in your claim:
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The Opinion Of The Insured On The Claim
To successfully file a bad faith insurance claim, you have to tell your side of the situation. It’s through this information that the court will decide on the status of your case and make a judgment. Therefore, it should be part of your claim.
As you write down the accounts of the said day or scenario, be as detailed as possible, without leaving out any information. This is whether it shows you in a bad or good light; after all, the truth will always set you free.
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Proof Of Taking The Necessary Action
Insurance policies have varying ways of dealing with a claim; they’ll formulate procedures you need to take in the event of insurance activity. To prove you’re justified in getting the claim, you need to show the court that you took the necessary procedures.
Here, it’d be best to utilize witnesses and records from when the incident occurred. Suppose you’re involved in an accident. You can use the police or bystanders on the road as witnesses of you making a call to the insurance company and taking photographs of the scene. You can use the dates and time on your phone to verify that you took the pictures of the scene on the given day and at the said time. Your phone call records could also prove you made the call to the insurance company. Your lawyer can assist you in getting the said pieces of evidence. In relation to that, you may click here to make sure you get yourself a reputable advocate for your case.
The benefit of having proof you did the right thing is that an insurance company might claim you skipped a procedure during the reporting stage, hence, why they took the action at issue. Should you have deviated from the procedure, your case won’t be able to stand in a court of law.
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Time Frames
When presenting any case, including a bad faith insurance claim, it’s always essential to include time frames. These will show that you’re well aware of all the events involved in your case. They also act as evidence as to how the events occurred.
If you sent an email to the insurance company, write down the date and time you did it. Do this for all the calls, messages, and physical visits you made to their offices.
Should you fail to prove the occurrence of a given event, the insurance company might defend themselves and say that you’re also unsure of the events leading to the claim. This would put you in a bad light, and there could be a possibility of your case being thrown out.
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Supporting Documents
A bad faith insurance claim should have supporting documents beyond your evidence. They’re the documented aspects that stand as legal evidence before a court. One of the documents you need as you make this claim is the laws in your state binding insurance company. These laws are in a document often referred to as unfair claims practices acts. You’ll present it as proof that the insurance company went against state laws and, thus, needs to be held accountable. To make things easier, don’t carry the whole act; have the specific clauses printed out to save time and show the court your thoroughness and knowledge of your case.
In addition, you must carry the insurance policy contract you signed. The contract pinpoints your agreement and shows the insurance company’s obligations. The policy will show the courts the nature of your relationship; it’ll help them make valid conclusions and sound judgments.
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Evidence Of Insurance Company Knowing Of Their Breach
In most states, laws on bad faith insurance claims require you to prove beyond reasonable doubt that the insurance company was well aware of their breach. Therefore, you need to gather evidence to back this up. But, where do you get them?
Evidence you could utilize here is if, on failure to pay the claim or whichever situation, you approached the insurance company to inquire about the incident. What was their approach? Did they confess to making a mistake, or were they rude? For example, if they said there was nothing you could do about it upon reporting, out of ignorance. They could also say it’s too late to do anything; what’s done is done, and you should move on. Such statements prove that the company was well aware of its mistake and chose not to rectify the situation.
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Failure To Conduct An Investigation
An insurance company is required by law in most states to investigate the occurrence of an insured risk. The investigation aims at understanding the situation and knowing the amount of claim you’re entitled to based on the circumstances and their severity.
Therefore, should your company award you your claim without asking any questions about the incident, you can and should file a bad faith insurance claim.
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Failure To Respond To A Claim Within A Given Time Frame
In most cases, on the receipt of an insurance claim, an insurance company should reply to your case within a given time frame. This time frame isn’t in a state’s constitution but is often in the policy contract you have with your insurance company.
Yes, they might have given you a response, but what if they did it three months after you filed the claim, yet, in your agreement, it says within a week? You can tell the court that it was inconvenient for you and might have affected your health due to stress.
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Failure To Explain Claim Denial
Filing for an insurance claim doesn’t necessarily mean you’ll get awarded. The insurance company might have done their investigation and ruled out the possibility of payment. This could arise from you not following the procedure, or the event not being on their cover based on your subscription plan, among other reasons.
Either way, the insurance company is obligated to inform you why they didn’t compensate you for the claim you filed. Failure by them to do so is a form of the breach and must, therefore, be one of the constituents of your bad faith insurance claim.
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Failure To Compensate You Accordingly
As previously stated, your insurance company will investigate your claim to assess the situation and figure out how much they should pay you. If on awarding you the claim, you feel that it’s unfair and you believe you should’ve received more, this should also be a vital element in your bad faith insurance claim.
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Alteration Of Policy
Some insurance companies might be fraudulent and decide to rob off their insured clients. One of the ways they can do this is by altering the insurance policy you signed up for without them informing you. This means you’ll both be depending on different documents, although you should be working on a similar one.
In the event of an insured risk occurring, the company will produce the illegal document and use it to analyze your case, which is likely to lead to wrongful compensation in one way or another. In this scenario, the alteration will become a major element in your bad faith insurance claim.
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Policy Cancellation
This element is almost similar to the alteration of the insurance policy, but, in this case, instead of the company changing a section of the document, they’ll completely cancel the policy. This would become a problem if you filed a claim during the document’s existence.
Here, you have to prove beyond reasonable doubt that the insurance company cancelled the policy with the intent of not paying your claim. A company could cancel if they’re facing financial issues and the policy you took is expensive to compensate.
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Failure To Acknowledge A Claim
Failure to acknowledge a claim is one element of a bad faith insurance claim. Once you report your case to the insurance company and request a claim, the company should inform you they’ve received the claim.
There are many ways you can prove the company received the claim but didn’t acknowledge it. One, if you sent it through email, and you can see they read it through a mail tracker or any other way, yet, they didn’t respond in any manner. You could also have physically dropped the claim documentation at their office and handed the document to the secretary or the personnel in charge; it might now be more than a week later, and you’ve yet to receive a call from management regarding the claim. However, you need substantial evidence on this since mere negligence by the insurer won’t suffice in court.
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Failure To Disclose Policy Limitations
In most cases, before signing or subscribing to an insurance policy, the insurance company’s agent will take you through the policy details. Here, they’re supposed to disclose all information, including the limitations of the policy.
Consider a situation where the event you’ve insured for occurs. You go ahead and file a claim with your insurance company. The company then says it can’t compensate you for the event due to your insurance policy coverage. The insurer might go ahead and show you areas where the limitation is stated. However, this is news to you, and no party has ever informed you of this. You can decide to go ahead and file a bad faith insurance claim for the company not divulging the limitations to you from the onset.
Conclusion
You’ve seen the elements you need to include in your bad faith insurance claim from the discussion above. Consider incorporating these elements in your claim for you to successfully sue your insurance company. As you undertake this procedure, there are a few things you need to note.
One, it’s important to ensure that your claim adopts all the minimal principles it needs before a court of law. It can be very hard to file a bad faith insurance claim because incidents of negligence and mistake don’t amount to a bad faith insurance claim. Therefore, it’s best to seek assistance from a lawyer specializing in this field or a claim adjuster. By seeking professional assistance, you’re more or less assured of having a solid case that’ll ensure you’re well compensated in court.