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A car accident can result in devastating financial damage and a long physical recovery from injuries. You pay your auto insurance premium diligently as a safety net when an accident like this happens. The last thing you want to encounter is resistance on the insurance company’s end to pay for damages. Now you must navigate recovery while battling against a large company.
Sometimes insurance companies use unfair tactics to avoid paying policyholders. This is known as acting in bad faith. If an insurance company is acting in bad faith, then you may be able to sue the insurance company for refusing to pay the claim under your policy or sue your insurance company for failing to effectively defend you.
Five common bad faith practices
Understanding known insurance company tactics can help you fight against them and know when to seek legal counsel. Read the following five most common bad faith strategies:
- Lowball settlement offers. The insurance company may offer to pay much less than the total cost of repairs. When finances are tight, a policyholder will feel pressured to accept the offer.
- Unfair claim delays. Auto insurance companies often drag out claim investigations to get policyholders to accept lowball settlements. Some policyholders give in after weeks or months of stalled communication and payment.
- Failing to conduct full investigations. This may happen when an insurance adjuster does not fully investigate how the damage occurred or how much it will cost to repair, resulting in an unfair outcome for the policyholder.
- Misinterpreting the policy. Insurance adjusters may try to use convoluted policy language against you, stating that damages are not covered under your policy when they should be paid for by the company.
- Unfair claim denial. The insurance company may purposely fail to disclose damages that are covered under your policy or they may deny your fair claim altogether.
If you experience unfair treatment from an auto insurance provider, then you may be able to file a first-party or third-party bad faith claim with the help of an attorney. After months or years of loyally paying insurance premiums, you deserve equally faithful treatment from your insurance provider.
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