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What is insurance bad faith and how can you avoid it?

On Behalf of | Oct 29, 2021 | Uncategorized

Certain situations can require residents of Texas to go through an insurance company for coverage. Of course, when you rely on an insurance adjuster, you expect things to be fair and above board. Unfortunately, insurance bad faith happens on occasion. It’s important to understand what this constitutes and how to avoid it.

What is insurance bad faith?

People buy insurance to cover potential losses from an injury or damage to property. This is in place as a way to protect the person in the event that an accident occurs and they might be sued or owe money on damages they or a third party suffers. Insurance companies owe a duty of good faith to people who buy policies from them. However, there are times when insurance bad faith can happen. When an insurance adjuster or the insurance company itself uses deceptive practices, avoids paying a claim or uses unfair and illegal means to provide a settlement, it’s considered bad faith.

What are the most common bad faith tactics?

Insurance bad faith commonly occurs when a person has to go through someone else’s insurance company to get a settlement. For example, if you suffered an injury after getting involved in an accident with another driver who was at fault, you might need to go through their insurance to get compensation. This requires having to deal with an insurance adjuster. Certain tactics are common when insurance bad faith happens. The adjuster might outright deny your claim in spite of the facts and without providing a reason, even after an investigation into it.

It’s a common insurance bad faith tactic to ignore or delay paying you what you’re due. Sometimes, this is done with the intention of going past the statute of limitations. In some cases, the insurance company might eventually pay but take an unreasonably long time to do so.

Another very common tactic is for the insurer to offer a settlement that’s far below what’s fair considering the situation. If you suspect that it’s happening to you, you should protect your rights and fight back.