How to Tell If Your Insurer Is Negotiating in Bad Faith
In theory, filing an insurance claim should be relatively straightforward: you submit a claim to your insurance company, an adjuster investigates the facts of the accident to determine the amount you’re entitled to under your policy, and the insurer makes the payment. But that’s just in theory. While filing a claim may go smoothly, many insured Floridians discover that their insurance company is reluctant to pay, gives a lowball offer, or denies the claim altogether.
If the insurance company denies a legitimate claim in bad faith, it could be liable for much more than the original cost of the claim. If you suspect that your insurer isn’t negotiating in good faith, you should speak with a personal injury lawyer as soon as possible. Bad faith insurance disputes are often lengthy and complicated, so you need to be able to prove that your insurance provider acted in bad faith and that your case isn’t just a matter of you and the insurance company disagreeing on a fair payment.
Signs of Insurance Bad Faith
Here are a few indications that your insurer may be acting in bad faith:
Delaying, denying, or offering a low payment for a claim without having a reasonable basis. It’s up to the claims adjuster to determine the payment amount you are entitled to, and your insurance company should be able to offer a written explanation for their payment decision based on the adjuster’s observations and the terms of your policy. If they can’t do this, it’s likely a sign that they are unreasonably delaying, denying, or discounting your claim.
Failing to provide a statement setting forth coverage under which payment is being made. Under Florida’s bad faith insurance laws, an insurance company is required to provide a written statement indicating the coverage in your insurance policy under which they’re making their payment.
Failing to promptly and thoroughly investigate a claim. Insurance companies have a duty to send an adjuster to investigate all claims. However, some companies try to shortcut this process by sending someone who is adjuster’s identification, such as a business card with a license number. If they cannot prove they are licensed, the insurance company may be acting in bad faith.
Purposefully making the claim submission process more difficult than is necessary. In some cases, the insurance company might make their claim submission process intentionally difficult in order to discourage policyholders to file a claim. For example, in an injury case they might require both the claimant and the claimant’s doctor to submit a preliminary claim report and formal proof of loss forms, even though these documents will contain essentially the same information. They might also try to get a policyholder to first pursue a claim against a third party before offering any kind of settlement.
Using intrusive or even illegal methods to investigate a claim. This isn’t very common, but it’s still worth mentioning. In some cases, an unscrupulous insurance company might use intrusive or illegal investigation methods, such as trespassing on a claimant’s property, in an attempt to prove that a claim is fraudulent.
What to Do If You Suspect Your Insurer Is Acting in Bad Faith
These scenarios are just a few examples of bad faith cases, and by no means do they represent a definitive listing of all potential bad faith situations. If you’re unsure whether your situation qualifies as bad faith, the best thing you can do is talk to an experienced insurance claims attorney. If your lawyer determines that your insurer is negotiating in bad faith, he may first help you draft a written accusation of bad faith to send to your insurance company. If the insurance company fails to respond or change their settlement position based on this accusation, you and your attorney may need to file a lawsuit.
As noted earlier, attempting to win bad faith disputes can be an uphill battle, but oftentimes, the threat of a trial is enough to convince your insurance company to work out a reasonable settlement out of court. Whether the case goes to trial or not, it may take legal action to get a bad faith insurance company’s attention. Once you show the company that you’re aware of their bad practices and unafraid to take action, they’ll be more likely to provide you with the payment you’re entitled to under your policy.
About the Author:
Lawlor Winston White & Murphey. He has been recognized for excellence in the representation of injured clients by admission to the Million Dollar Advocates Forum, is AV Rated by the Martindale-Hubbell Law Directory, and was recently voted by his peers as a Florida “SuperLawyer”—an honor reserved for the top 5% of lawyers in the state—and to Florida Trend’s “Legal Elite.”