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Bad faith practices may disrupt insurance claims

On Behalf of | Jan 14, 2022 | Uncategorized

Insurance policies cover risks. When someone purchases a renter’s or auto insurance policy, the provider accepts payment to cover financial losses related to covered perils, including property damage and personal liability. As long as the policy customer follows the rules and the incident is not excluded, the insurance company should pay what it owes. Unfortunately, Arizona court documents reveal some insurers face lawsuits over bad faith practices.

Bad faith insurance claims

When an insurance provider attempts to get out of its legal obligation to pay for a loss, the provider may be engaging in bad faith practices. Such behaviors open doors for a lawsuit since the insurance company might be breaching its contractual duties.

An insurance provider would not likely deny a claim after explicitly stating it merely does not want to pay. Such action would be an admission of wrongdoing. However, an insurance company employee might misrepresent the terms and policy, such as claiming a peril falls under exclusions when it does not.

Sometimes, the language in the policy is troubling. Poorly worded or deliberately confusing language may rise to bad faith levels. A court could find such behavior egregious.

Other examples of bad faith behavior

Various other problematic actions could lead to bad faith insurance claims. Among the more common examples would involve attempts to settle the claim for far less than the deserved amount. Unfortunately, some insurance policy clients might not realize what the company is doing and accept a weak offer.

Completing the claims process could take time, as the adjusters must review evidence. However, processing a claim should not involve needless or deliberate delays. “Dragging feet” over a claim reflects another possible bad faith strategy. Regardless of what form bad faith actions take, the policyholder might need to challenge the behavior in court.