When you purchase a home insurance policy, you are taking steps to cushion your property from financial losses should a disaster like a flood or fire happen. And if you keep your end of the bargain, by paying your premiums on time, you can have peace of mind that the insurance carrier will show up in your hour of need.
Unfortunately, it is not uncommon for the insurance company to backtrack on their commitment to you. Legally speaking, this is known as insurance bad faith. If you believe the insurance company is wilfully attempting to deny or frustrate a genuine claim, you deserve justice. You may pursue a bad faith claim against the insurance carrier in question.
What exactly is insurance bad faith?
Most contracts are inherently founded on good faith, and insurance contracts are no exception. In other words, each party has a duty to act in good faith per the terms of the contract. Therefore, if the insurance company opts to reject or frustrate a clearly genuine claim, the law allows you to take legal action against them for acting in bad faith. But like any legal matter, you need evidence.
Here are two questions that can help you build a bad-faith case against the insurance company.
1. Are they unnecessarily delaying your claim?
The insurance underwriter has a duty to investigate a claim before approving compensation. And this may take time. However, if they are deliberately pulling all manner of tricks to delay the compensation, then you need to ask questions. They could as well be doing this to frustrate you into giving up your claim or accepting a lower compensation amount.
2. Are they giving an unreasonably low offer?
It is not uncommon for the underwriter to offer a lowball offer. After all, insurance companies are in business to protect their bottom line. However, if they are not willing to negotiate a settlement, then you might have no option but go to court.
Protecting your rights
Insurance bad faith can be very frustrating, to say the least. If the insurance carrier is not acting fairly while handling your claim, you need to explore your legal options.