3 Things You Need To Prove For Your Bad Faith Insurance Claim

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An insurance policy is a contract between the carrier and the insured. The insured agrees to pay premiums, and the carrier agrees to compensate the insured in case of losses. An insurance company acts in bad faith if it fails to adhere to the terms of the contract. If your insurance company acts in bad faith, you have the right to sue the carrier for a bad faith claim.

Policy Validity

You must prove that you have a valid insurance policy. You don't have a valid claim if:

  • Your insurance policy had elapsed before you filed your claim
  • Your insurance company had canceled your policy before you filed your claim
  • You presented fraudulent information that essentially invalidated your policy as per the insurance company's terms and conditions

The court will use the applicable insurance laws plus your carrier's regulations to determine the validity of your policy.

Carrier Failures

Secondly, you must prove that your insurer failed to hold their end of the bargain as per the terms of your policy. Below are some of the typical failures.

  1. Claim rejection. This applies if you file your claim as per the carrier's requirements, but it fails to award you any compensation. Maybe the carrier informs you that they don't owe you any compensation.
  2. Partial compensation. Partial compensation arises if the carrier accepts your claim, but only gives you a fraction of the compensation. Maybe your loss is worth $100,000, but the insurance company only wants to give you $10,000.
  3. Claim delay. In this case, the carrier neither denies nor accepts your claim. You can wait forever for a decision from the carrier without getting any.

These are common carrier failures, but there might be others. Consult an attorney for clarification and help if you are unsatisfied with your carrier's actions.

Invalid Rationale

No Explanation

In some cases, the insurance company might fail to provide you with any reason for its decision or indecision. This is usually the case with an insurance carrier that is dilly-dallying with its decision, waiting for you to give up your pursuit of compensation.

Unreasonable Explanation

An insurance company can also offer you an unreasonable explanation for its actions. For example, the insurance company can claim that you:

  • Were late with your claim filing
  • Have not provided sufficient evidence for your losses (even if you have)
  • Filed a claim for an excluded loss (even if your policy doesn't state the exclusion)

Since unreasonableness is subjective, you need an independent party to asses and rule on the issue. The applicable civil court will act as this reasonable party.

To learn more, contact a personal injury attorney in your area.


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