Spotting Bad-Faith Insurance in Action
Since an auto insurance company’s job is to provide compensation in the event of a crash, you would assume that making a claim would be an easy process to go through. You pay your insurance company premiums in order to retain your insurance, so when it finally comes time to use said insurance, your provider, or the provider of the at-fault driver, should happily hand over the compensation that you need. Sadly, you would be mistaken.
Why Do Insurance Companies Commit Bad Faith?
When you pay into an insurance plan, the insurance company makes money. When you file a claim and recover compensation, the company loses money. To the company, that loss is unacceptable. Despite the fact that these insurance groups cut commercials to show themselves as “good neighbors,” they actually exist to make a profit, and your claim cuts into that profit. As a result, these big corporations will often try to lowball or deny as many claims as possible. When they do this through illegal means, it is called “bad faith,” and there are a few common methods that an insurance company will employ when acting in bad faith.
The easiest way to avoid paying out compensation is to simply deny the claim altogether. The insurance company may make several arguments to make the denial seem legitimate, including:
- You were actually at fault for the accident.
- You were not actually injured in the accident.
- The at-fault driver (their client) was not the one at fault.
- You have provided insufficient evidence for the claim.
- You have misread or misinterpreted the insurance policy.
- You are in violation of the insurance policy.
Never take any of these arguments at face value. Insurance companies are fully aware that they risk penalties when they act in bad faith, and will do everything they can to make a bogus denial seem “by the books.” This includes providing you with a seemingly legitimate excuse. If you claim has been denied, you should always seek a second opinion from an experienced attorney before accepting the denial.
Sometimes an insurance company can’t find a reason to deny your claim. In that case, rather than issuing a denial, the company may simply process your claim as slowly as possible. Claims require a great deal of back and forth between insurance company and person filing the claim. Each piece of paperwork will come with a deadline for completion, which is true on both sides. The insurance company must adhere to these deadlines, and they will. However, they will wait until the last possible day with each and every piece of paperwork and procedure.
This means that a straightforward claim that should have been finished within a few months could drag on and on, and potentially last years. The reason that insurance companies favor delays so much is that they know in the meantime you will need to figure out how to cover your medical bills on your own. The longer they delay, the more desperate you will be for money. When they eventually offer you a settlement, you will be in a position where you have to take it, no matter how low it is, just so you can try to pay some of your bills. This often means that insurance companies get away with offering far less compensation than they actually owe.
What You Can Do
When faced with bad-faith insurance, you may feel hopeless. How are you supposed to combat a nationwide corporation bent on denying you compensation? Well, what you should keep in mind is that bad-faith actions are illegal, and punished by the Colorado Division of Insurance. Insurance companies have a legal obligation to deal with you in good faith and offer you the compensation you are owed. The legality of bad-faith tactics doesn’t stop some insurance companies from committing them, but it does mean that you can take a stand with the law backing you.
In fact, you can file a claim against the insurance company itself. However, doing so will require a great deal of help. These companies specialize in squashing claims, and they will try to do the same to you. Your best bet is to contact a skilled attorney with experience fighting against massive insurance companies. We at The Bussey Law Firm, P.C., never back down when a client’s settlement is on the line. You can contact us online, or by calling (719) 475-2555 to start your free consultation.