You bought an insurance policy to protect you against the financial losses associated with a motor vehicle collision. For example, under the law most states must carry coverage to protect against injuries and damages you might cause to others while you are driving. You may also have an auto insurance policy that also helps pay for medical bills and other property damage expenses you incur, for the circumstances where you are either at fault, or where the other driver has no or inadequate insurance coverage to pay for your losses. Because you pay your monthly insurance premium, you expect your insurance company to honor its legal obligations to cover your financial losses.
Unfortunately, far too many insurance companies do not honor their legal obligations as a motorcycle accident lawyer knows all too well. In other words, the insurance company is not following its own rules established by the insurance policy it provided to you in exchange for paying the premiums. When an insurance company engages in this practice, the result is you face the negative consequences of bad faith insurance.
How Is Bad Faith Insurance Defined?
Bad faith insurance is not a specific type of policy. The term is used whenever an insurance company fails to honor its legal obligations when it comes to administering an insurance policy. Every insurance policy contains carefully worded legal obligations, such as defining when an insurer must compensate a policyholder for a claim. There are two main categories of bad faith insurance. The first category is called first-party bad faith insurance, which represents an act in which your insurance company commits an act of bad faith against you. The other category is third-party bad faith insurance, which includes the participation of a third party such as an auto repair shop.
What Are The Most Common Cases Of Bad Faith Insurance?
Understanding the different ways your insurance company can act in bad faith helps you and your attorney build a strong case.
Deny A Legitimate Claim
Insurance adjusters have many obligations under the law, but often they act as if they have only one responsibility: to minimize the amount of money paid out on claims. The most effective way to lower claim payouts involves denying valid claims. You can contest a denied valid claim according to our friends at Herschensohn Law Firm, PLLC by submitting more physical evidence, as well as presenting the statements made by witnesses. The insured must cooperate with the insurance company, but if the insurance company fails to pay on a valid claim, that is bad faith.
Delay A Claim Review
One of the oldest tactics of bad faith insurance involves an insurance adjuster considerably slowing down the claim review process. The goal of this type of bad faith is designed to discourage a policyholder from following through and advancing the progress of a claim. Another claim delay tactic regards frequently asking you to submit never ending amounts of evidence to strengthen your claim. Hiring an attorney ensures your claim receives the attention it deserves in a timely manner.
Undervalue A Claim
Also called a lowball claim, an undervalued insurance claim concerns an insurance adjuster approving your claim, but for less compensation than you deserve. Another important role for the personal injury lawyer that you hire is to calculate a reasonable value for compensation. This involves adding up the tangible costs associated with your case, such as medical bills and auto repair invoices. You also have the right to seek compensation for non-economic damages, which often include the costs associated with emotional distress issues.
The most effective way to prevent this conduct is to be proactive by hiring an experienced personal injury attorney. Your lawyer helps you fight back against a denied legitimate claim, a delayed claim, an undervalued claim, and even an unjust increase in your monthly premiums.