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Recognizing when insurers are being unfair with insurance payouts

On Behalf of | Jul 23, 2024 | Bad Faith Insurance |

Financial recovery is one of the key aspects of an insurance claim. Those who have made a claim for loss should recognize how companies are obligated to conduct themselves regarding financial offers and settlements under state law. If the company fails to hold up its end of the bargain, policyholders have legal options.

Insurers must follow the rules with financial settlements

Since the financial return is the primary part of insurance, if an insurer acts in bad faith, the policy holder should know how to recognize it and put a stop to it. The company cannot refuse to pay a claim without conducting a reasonable investigation as to the incident that precipitated the claim.

For example, in a case involving motor vehicle accident injuries, the claim cannot be denied without assessing the damage, the injuries and other types of loss.

After the loss statements have been provided, the insurance provider must make its decision to affirm or deny coverage of the claim within a reasonable time frame. After liability is established, there must be a good faith attempt to settle it in a fair way. The insurer cannot behave in a way that would compel the policy holder to file for litigation to recover what they believe they are entitled to by making an offer that is significantly less than what would be recovered through a reasonable assessment of the claim.

There are avenues to address bad faith insurance

In short, insurance providers are expected to abide by the terms of the agreement, conduct a full investigation into the claim and follow the law for operating in good faith. Failure to do so could warrant a bad faith insurance claim.

Insurance companies who behave in this way could be required to pay damages or what they owe based on the policy along with interest. There are other payments that could be ordered as part of a claim. This is to penalize them and compensate the policy holder. If there is a suspicion of bad faith insurance, it is essential to know the options and to have advice.

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