What to do if your insurance company ignores or misleads you
Written by: Enjuris Editors
Insurance exists to protect you and your family when accidents occur.
When it comes time to collect compensation after an accident, the law protects you as well by requiring the insurance company to “act in good faith” when responding to your claim.
What does this mean? This obligation applies to any insurance company offering first-party insurance policies, including life and homeowner’s insurance, as well as auto coverage and workers’ compensation insurance. It says that both parties have disclosed all critical personal information and are acting in truthful and ethical ways. Sounds good, right?
Sometimes, however, these relationships turn sour. When any of these insuring bodies refuses to pay you benefits that you’re owed or denies your claim without a reasonable basis, this is said to be acting in “bad faith,” and you may actually have grounds for a lawsuit.
Keep in mind that just because you disagree with a claims adjuster, that isn’t necessarily grounds for bad faith.
You might have a vastly different opinion than the insurance company and think your claim is worth a lot more than it actually is. You might even be at fault for the accident and not think you are. In this sort of situation, it’s worth speaking to an attorney to see if your suspicions are based in reality.
How do I know if I have grounds for a bad faith lawsuit?
An insurance company might violate their obligations under a contract with you in a number of ways. If any of the following situations sound familiar, it’s probably time to contact a lawyer.
The workers’ compensation insurance provider won’t even look at your claim: Unfortunately, some insurance providers count on the statute of limitations. The time limit for filing a claim in a workers’ compensation case varies state by state, but it’s sometimes as brief as a few months or even 30 days. Their hope is that by delaying your claim long enough, the statute will run out.
In these situations, the insurance company is counting on the fact that you’re uninformed. Ignorance of the law is no excuse, and they won’t care that you didn’t know the statute of limitations was running out. You can protect yourself by knowing your state’s law in reference to your claim or by hiring a workers’ compensation attorney to help you understand your rights. This attorney can also determine whether the insurer is acting in bad faith. An objective determinant is always helpful in situations such as these.
I was injured in a car accident, and the Personal Injury Policy (PIP) won’t pay out: PIP coverage on car accident policies exist in order to keep an injured driver from suffering undue financial hardship, but sometimes these insurance providers simply refuse to pay a claim.
If you can prove that your injuries resulted from the accident and that the PIP in place legally covers you, consider contacting a personal injury attorney experienced in car accident lawsuits. He will know the methods that car insurance companies use to deny claims, and he can determine if the denial constitutes an act of bad faith.
My claim was denied based on false or misleading information: Companies offering workers’ compensation insurance, personal injury policies, life insurance – just about any first party insurance policy, really – sometimes try to circumvent their obligation to act in good faith.
They may mislead you about the nature of your coverage in an attempt to convince you that your claim isn’t valid. They might just bombard you with an avalanche of forms or multiple requests for information. Here, again, the insurance company is banking on your lack of experience and information about your rights.
What to do if you suspect an insurance company is acting in bad faith
Document everything. This includes everyone with whom you spoke on the phone, dates, times, names and titles. Keep copies of your medical bills and all records related to your injuries, as well as all correspondence from the insurance company. If you can get things from the insurance company in writing, choose that option.
If you decide to pursue a bad faith case, hire an attorney who is well-versed in that area of law. If it’s related to workers’ compensation, you’ll also want an attorney who has that background, while a personal injury attorney will be good for a motor vehicle case. Speak with a number of different attorneys and get a feel for what their areas of expertise are. If you’re still unsure, check out the Enjuris law firm directory for help!