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What are bad faith insurance practices?

On Behalf of | Dec 28, 2022 | Car Accidents |

After a car accident, Montana residents can be left in a difficult situation. They may have significant damage to their vehicles and may have injuries. Some of the injuries could be serious and require significant medical treatment.

Soon after the accident, a driver’s attention may turn to how they will pay for everything. For this, they may rely on their insurance coverage..

Unfortunately, there are times when insurers deny a claim or give a policyholder much less than they deserve. There can be legitimate reasons why the insurance company denies the claim based on policy limits or other reasons. However, there are times a insurance company denies the claim in bad faith.

Ways insurance companies may act in bad faith

Insurance companies have responsibilities, and if they fail to follow through with those responsibilities, policyholders may have a bad faith insurance claims against them.

Under Montana law, the responsibilities of insurance companies include, but are not limited to:

  • Not misrepresenting facts or insurance policy coverage
  • Communicating promptly about insurance claims
  • Promptly investigating claims
  • Conducting a reasonable investigation into the claim before denying it
  • Must either approve or deny the claim in a reasonable amount of time
  • Pay fair settlements once their responsibility becomes clear
  • Not forcing the insured into litigation by offering significantly lower settlements than the insured recovers through litigation
  • Not paying a portion of the claim that responsibility is clear to use it as leverage for other parts of the claim
  • Making settlement payments to the appropriate people promptly
  • Providing a reasonable explanation for the denial of any claims

Montana residents expect they will receive the insurance coverage that they deserve after an accident, but insurance companies are a business, and paying claims can hurt their bottom line.

These companies may have an incentive to keep settlements low to help that bottom line. When they pay less than a claim is worth, they may be acting in bad faith under the law. These are complicated claims and consulting with experienced attorneys could be beneficial.


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