What Is Bad Faith Insurance?

Bad faith is a term that applies to certain practices or actions undertaken by an insurance company. In general, when an insurance company attempts to deny you payments for a claim that is justified or based in good faith, a bad faith insurance claim could result. This is true whether the bad faith attempt is successful or not. If you have been the victim of bad faith on the part of an insurance company, you may be entitled to compensation.

What Is Bad Faith On The Part Of An Insurance Company?

While not all activities on the part of an insurance company can be classified as bad faith, there are a wide range of actions that can lead to a bad faith insurance lawsuit. Bad faith can include many different actions, such as:

  • Lost paperwork. Sometimes companies will repeatedly claim that you have not turned in the proper forms or that the forms have been lost, leading to delays in payment.
  • Unnecessary appointments. Sometimes insurance companies will attempt to deny your claim by forcing you to see multiple doctors in the hopes that they will receive conflicting medical reports to bolster their assertion that you are not injured or sick. Additionally, they may hope that the numerous doctor’s appointments will cause you to drop your case.
  • Ignoring information from a doctor. Your insurance company may ignore reports from your doctor that claim that you are injured or may question the accuracy of your doctor’s statements. In some cases, this can be considered bad faith.
  • Offering to “settle” a claim. When an insurance company suggests that a claimant take a smaller amount for his or her legitimate claim, it is often a sign of bad faith on the part of the insurer.

In many cases, you may be forced to go into debt to cover medical expenses while you wait for an insurance company to approve your claim.

Denial vs. Bad Faith

It is important to understand that simple denial of a claim is not necessarily bad faith. Sometimes insurance companies have a valid reason for denying a claim. However, it is important to know that just because an insurance company issues a claim denial it does not mean that all hope is lost for collecting money for your injuries or illness. Instead, denial by an insurance company should be the motivation you need to seek legal advice on your case.

What Compensation May I Collect From a Bad Faith Case?

If an insurance company is found to have acted in bad faith, you may be entitled to compensation including the original amount due from your policy as well as additional funds for your pain and suffering and, in some cases, for punitive damages against the insurer. For additional information, read our article on how bad faith can affect my personal injury claim.

At David & Philpot P.L., we have over 20 years experience taking on insurance companies who have acted in bad faith against their policy holders. We have a strong understanding of the law in this area and can help you determine if bad faith is a factor in your situation. Give us a call today at 800.360.7015 or fill out our free case evaluation form.