Insurance companies shouldn’t act in bad faith, but they do. The goal is often financial. If the insurance company can get out of paying a claim that they would otherwise have paid, they save a significant amount of money.
This does not mean that every single claim that is submitted has to be paid. But insurance companies have to act fairly and within a certain framework. Failing to do so could be seen as acting in bad faith. The following are a few examples.
Manipulating the terms
For one thing, the insurance company may try to misrepresent or manipulate the terms of the contract. The agent could tell someone that they are not covered when they clearly are. This misrepresentation could just be an effort to get the customer to drop the claim. The customer themselves may believe that they do not have a case when they actually do.
Creating delays
Another tactic is just to make the process take longer. Maybe the insurance adjuster won’t respond to your emails or phone calls. Some delays are unavoidable, but an insurance company that intentionally creates unnecessary delays is acting in bad faith.
Not gathering proper evidence
Finally, before denying or approving a claim, the insurance company needs to do its due diligence to gather proper evidence and understand the claim. If they fail to do so and simply deny the claim outright, it could qualify as bad faith. They can’t just issue denials without conducting any investigation.
If you feel that your insurance company has been treating you inappropriately or even illegally, take the time to carefully look into all the legal options at your disposal.
