Insurance Bad Faith

The Insurance Policy

An insurance policy is a contractual agreement between you and the insurance company wherein you agree to pay a premium in exchange for monetary compensation in the event of a covered loss. These contracts with the insurance company include plenty of exclusions and exceptions. Policies are chocked full of legalese and can be difficult for the average person to understand all of the terms and conditions. The small print and legalese creates lots of wiggle room for the insurance company which they will exploit in order to deny or reduce your claim and in doing so, may have acted in bad-faith.

Insurance Underwriting

The insurance company will collect relevant information from you in order to determine your risk and their likelihood of having to pay a claim for you. This process is known as “underwriting.” It is how the insurance company determines if they will insure you and how much your premium will be. Fearful that they may be denied coverage or in an attempt to reduce their premiums or to try to get a pre-existing condition covered, some policyholders are dishonest when they complete their insurance policy application. This may be that you were a smoker or have heart condition but failed to disclose it to the life insurance company or that your car already had damage before you bought the car insurance policy and then you filed a claim with the insurance company. Failing to disclose relevant information that was requested by the insurance company prior to issuing the policy is good cause to deny your claim and, if it was intentional it could be insurance fraud.

Insurance Bad Faith

Sometimes insurance companies will build into the application or the fine print unfair terms and conditions. The insurance company will then use these terms and conditions to unfairly deny your claim after having collected premiums from you for years. This could be bad-faith on the part of the insurance company.

Aside from health insurance, the most common types of consumer level insurance policies are life insurance, automobile insurance and homeowner’s insurance. Insurance companies will often exploit the fact that theses policies are difficult to understand and are full of legalese, loopholes and fine print that puts the policy holder at a huge disadvantage when it is necessary for the to file a claim. In some cases, insurance companies will act unreasonably in denying or reducing claim amounts. Often, the insurance company will find some insignificant reason, buried deep in the fine print of the insurance policy, to unreasonably deny your claim or delay in paying your claim.

In most cases, the insurance company will come to their senses and pay the claim knowing that they are compelled to do by the terms of the policy. However, in cases where the insurance company has unreasonably reduced or denied a claim you will probably need the assistance of an experienced bad faith insurance attorney if you hope to receive a fair settlement.

At The Attorney Injury Network, we have extensive experience dealing with insurance companies that have committed wrongful deeds or used corrupt practices. We have a thorough understanding of the precedent that has been set against such companies for bad faith, allowing us to accurately evaluate the merits of any case.

In addition to the common law duties that are required of insurances, California has also implemented a code of regulations that creates standards for prompt, fair, and equitable settlements, as well as rules defining what constitutes unfair methods of competition and deceptive business acts.

If you have questions about insurance bad-faith or if you have been unfairly denied coverage by your insurance company, call the bad-faith insurance experts at the Attorney Injury Network today 1-800-935-8511.

Insurance Companies Have Specific Duties

Insurance companies treat their policyholders and prospective policyholders fairly in regards to any business related matter. This means that an insurance company has to be open and honest with you, and put your best interests ahead of their own. They cannot use deception, scams, or pretense, and they are required to be reasonable in the speed and nature of their communications.

The following is a list of some of the practices considered bad faith under California law; violating any one of these standards is an actionable offense:

• > Misrepresenting the terms of any policy on an estimate, illustration, or statement to a client.
• > Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.
• > Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.
• > Attempting to settle a claim by an insured for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.
• > Failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement.
• > Directly advising a claimant not to obtain the services of an attorney.
• > Misleading a claimant as to the applicable statute of limitations.

Duty to Settle Claims Prior to Litigation

Insurance Companies have a duty to mediate with the other party in an attempt to settle a claim or dispute. The policyholder and the insurance company should review the options, and reasonably discuss the most sensible solution. In the event that the company denies you the opportunity to settle, makes a less than bona fide attempt to settle, or ignores important investigations necessary to settle, they are liable for breach of this duty.

Duty to Settle Claims in Full Amount

Insurance companies also have a duty to settle claims in full. Insurance companies cannot deny your claim or refuse to pay the full value of your claim based on the fact that you own another policy with another insurance company. In this way, insurance companies are jointly and severally responsible to their insureds. Insurance companies cannot force you to collect from other insurances coverages, nor can they restrict or reduce payment on the contingency that they only pay a pro rata share.

If you are having problems with your insurance company or if you have been unreasonably denied coverage of claim, call the bad-faith insurance attorneys at the Attorney Injury Network today. 1-800-935-8511