What does insurance bad faith entail?

Whether your home sustained roof damage in a storm or you were in a motor vehicle accident, you are likely to deal with insurance companies. Most people in Massachusetts and elsewhere will file an insurance claim at some point during their lifetime. Sometimes the process is simple and straightforward. However, in other cases, you may find yourself struggling with the insurance company at every step.

Most insurance companies, like other businesses, are competitive companies with financial interests. Their purpose is to compensate clients for damages, but they lose money if they pay out too much in claims. Therefore, insurance companies employ people who investigate the details of an accident or damaging incident and determine if a claimant should receive compensation, and if so, how much. You may find the investigation and approval process to go slowly, and it would not be unusual for your claim to be denied or for the insurance company to offer you less than you had hoped for.

As FindLaw explains, insurance bad faith can include dishonest, misleading and fraudulent practices meant to keep you from rightfully obtaining compensation for your damages. The following examples illustrate bad faith tactics:

  • Refusing to compete an investigation or to pay you on a rightful claim
  • Not meeting filing deadlines or failing to inform you of how to complete your claim
  • Denying your claim before conducting a full investigation
  • Disregarding benefits you are entitled to under your policy
  • Falsely informing you that your claim is fraudulent and you may face arrest or legal action

You may need experienced counsel if you suspect an insurance company is using bad faith tactics against you. As such, this post is not meant as legal advice.

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