Paying clients or customers rightfully expect to receive good communication and forthrightness from professional services providers in day-to-day life. This is especially true for instances when commercial policyholders need to file an insurance claim for property damage with their insurance providers. Although policyholders may assume their insurer will be more than willing to work with them to resolve and pay the claim to the fullest extent – this isn’t always the case. Some insurers instead choose to use bad faith tactics for their own benefit. Knowing when to hire a bad faith insurance attorney can give insureds an upper hand in ensuring their claims are properly investigated and processed.
Bad Faith Insurance Claims
For policyholders to know if it’s necessary to hire a bad faith insurance attorney, it’s important to understand what it means to act in bad faith in the context of the insurance industry. To start, each insurance company has a legal duty to act in good faith and treat the insured fairly. However, this does not mean insurers are obligated to pay out every claim.
The duties and obligations an insurance company must provide to its policyholders vary depending on the state. Insurance policies are legally binding contracts between the insurance company and the policyholder, and both parties are required to honor and abide by the policy terms. If an insurance company violates these terms, it can be held liable for breach of contract. In Texas, for instance, due to the unequal bargaining relationship that inherently exists between the insurance company and its insured, state law interprets any ambiguities in the policy to be in favor of the insured. If found liable for breaching these duties, an insurance company can be responsible for compensating the policyholder for additional damages, penalties, and attorney’s fees beyond what is owed to them under the policy.
Common duties an insurer must provide to the insured generally include:
- Responding to client inquiries and correspondence promptly;
- Conducting timely and reasonable investigations into claims;
- Approving, denying, and paying claims within a reasonable or state-specific timeframe;
- Explaining claim denials and citing specific policy provisions applicable to the denial;
- Defending the insured in a liability action where at least one of the claims is potentially covered by the insurance policy; and
- Paying for damages in a liability action up to the policy limits.
Insurance providers that fail on any of these duties could be attempting to act in bad faith. When this happens, it may be time to contact an insurance attorney who specializes in bad faith actions.
When You Should Hire A Bad Faith Insurance Attorney
Although not all insurance claim denials or disruptions necessarily mean the insurer is acting in bad faith, certain circumstances deserve additional scrutiny. It could be time to hire a bad faith insurance attorney, particularly when an insurer:
- Ignores receipt of the claim entirely;
- Does not perform a detailed and thorough investigation;
- Disregards evidence supporting the policyholder’s claim;
- Unreasonably delays a decision on the claim without explanation;
- Denies the claim without explanation;
- Intentionally underpays the claim;
- Intentionally withholds information on the claim;
- Fails to follow its claim and appeal procedures;
- Uses improper and misleading settlement tactics; and/or
- Discourages the policyholder from taking legal action.
While it can seem like a daunting task, hiring a bad faith insurance attorney can be incredibly beneficial to policyholders. While the insurance company is ultimately responsible for upholding its end of the contract, other parties involved, such as the adjuster sent by the insurance company, know how to manipulate claims. This is particularly notable, as adjusters are supposed to be unbiased individuals with no stake in the claim whatsoever. However, in most cases, adjusters are more likely to work for the benefit of the insurance company and not the policyholder. A seasoned bad faith insurance attorney will be familiar with the methods used by not only the insurance company but its representatives as well. Hiring an attorney in these instances can help to level the playing field for policyholders who may be intimidated by their insurer to accept the outcome of a claim when they shouldn’t.
An attorney will also handle most if not all of the correspondence with the insurer. This is important as insurance law is particularly complex and nuanced, making it incredibly easy for minor mistakes to be made early on by policyholders who may not fully understand their rights and responsibilities under a commercial policy. Attorneys who specialize in bad faith insurance actions know how insurers manipulate the rules for themselves. An insurance company may make filing a claim initially seem like much more of a hassle than repairing the damage out of pocket. These and other methods can make policyholders feel overwhelmed and tempted to simply give up on a claim altogether. Having an attorney who has seen and experienced these and other bad faith measures can help protect policyholders from being taken advantage of by a large corporation. By obtaining the proper representation, policyholders can ensure they have someone by their side who will fight relentlessly to get them what they are rightfully owed.
Insurance Coverage Attorneys
Property damage of any kind can put a great amount of undue strain and stress on commercial property owners. However, if a valid claim is found to have been drawn out, undervalued, or denied by an insurance company it can leave business owners unsure of what they can do. At Raizner Slania, we have successfully handled claims against nearly every major insurer for their use of bad faith claims handling tactics. If you are dealing with an insurance provider that has wrongfully delayed, underpaid, or denied your valid property damage claim, contact us today to see how we can help.
