At some point during our lifetime, everyone will need to submit some kind of insurance claim—whether it’s for homeowner, auto or medical insurance. Accidents, illnesses and natural disasters are, unfortunately, a part of life. Having to go through those things is stressful, demoralizing, and sometimes heartbreaking.
To make matters worse, there are some insurance companies who refuse to process and pay legitimate claims. This is called “insurance company bad faith”.
Insurance Company Bad Faith — What Is It?
Insurance companies are notorious for trying to get out of paying claims, and sometimes they have legitimate reasons for denying claims. However, there are some companies who will do absolutely anything to get out of having to pay out to their customers.
When an insurance company does this and the claim is a valid one, their actions are considered unreasonable, deceptive, dishonest and even fraudulent. It is against Colorado law and, according to AmericanBar.org, if the insured takes the insurance company to court, a jury could find them guilty of negligent activities.
Bad faith is legally considered a breach of contract. Therefore, the only person who can take the insurance company to court is the insured; no other third-party is allowed to do this. A case can only be made between the two parties that have a contractual agreement—the insurer and the insured.
Insurance Company Bad Faith Actions — 5 Ways It’s Committed
You deserve fair treatment by your insurance company. If you feel like you might be a victim of a bad faith insurance company, you may very well be correct in your assumption.
Below is a list of 5 of the most common ways insurance companies go about committing bad faith. We think that the more educated and aware you are of how some insurance companies try to get out of paying claims, the better equipped you’ll be to fight them.
- Refusing/failing to investigate the claim thoroughly and promptly
- Unreasonably delaying a claim payment to the insured
- Denying benefits that are clearly outlined in the insurance policy, thereby denying payment on a claim
- Being unreasonable in interpreting and translating policy language
- Refusing to reimburse you for what you are owed from the insurance company or refusing to settle their case with you.
If your insurer is guilty of committing bad faith, you have some options. You can negotiate with them and come up with a settlement agreement, give up on the case altogether, or hire an attorney to evaluate your case and fight for you.
According to Colorado law, when insurance companies are found guilty of bad faith by the court system, they could end up owing the insured up to twice the amount of the claim in penalties, in addition to the amount of the claim. Penalties that might need to be paid include:
- Damages for emotional distress
- Losses incurred
- Punitive damages (if the insured is found guilty of gross misconduct)
- Attorney’s fees.
The goal with rewards/settlements to the insured like this is to protect those who purchase insurance and prevent insurance companies from doing “whatever it takes” to avoid claim payments.
Protect Yourself from a Bad Faith Insurance Company
You should never try dealing with a bad faith insurance company because it usually leads to nothing more than stress and frustration. Instead, contact a personal injury law firm, like Bendinelli Law in Denver, if you think you’re a victim of bad faith. Insurance companies are more likely to take you and your claim seriously if you have an attorney who has experience in these types of cases.
We are happy to review your claim and paperwork and see what we can do to help get your claim settled to your satisfaction. Our team has the expertise necessary to determine whether bad faith has truly been committed. And, if it has, we have the experience and skills needed to fight and win for your right to settlement.