When you sign an insurance policy, you're entering into a contract that comes with the expectation that both parties will act in good faith. But what happens when an insurer falls short of this expectation?
What Is Bad Faith?
A bad faith insurance claim arises when an insurer unreasonably denies benefits or fails to fulfill its contractual obligations to its policyholder. This concept is rooted in the legal principle of the duty of good faith and fair dealing, which is implicit in all insurance contracts. Legal precedents have established that insurers must treat claims honestly and fairly, making decisions based on adequate information and reasonable judgment. Policyholders may have grounds for a bad faith claim when these standards are not met.
Types of Bad Faith Claims
Bad faith practices by insurers can take many forms, each with its own set of challenges for the unsuspecting policyholder. One common bad faith claim involves the insurer denying a claim without a valid reason, leaving the policyholder without the support they were promised. Another form is the failure to properly investigate a claim, which can result in unfair denials or underpayments.
Additionally, policyholders may encounter unreasonable delays in processing their claims, which can exacerbate their financial and emotional distress. These are just a few examples of how insurers can act in bad faith, and understanding the variety of these practices is the first step in recognizing and confronting them.
It's important to note that not every claim denial or delay constitutes bad faith. There are legitimate reasons an insurer may not honor a claim, such as lack of coverage or failure to pay premiums. However, when the reason for denial or delay is unfounded or when the insurer's actions are particularly egregious, such as misrepresenting policy terms or refusing to pay a claim without investigating, these actions can be classified as bad faith. By being aware of the different types of bad faith claims, policyholders can better assess their situation and determine whether they may have a case against their insurer.
If you're in Sacramento, CA, and facing a bad-faith insurance claim, remember that you have allies ready to support you. Piering Law Firm has a team of experienced personal injury attorneys who understand the complexities of insurance law. We're committed to protecting our client's rights and helping them secure the compensation they deserve. If you believe your insurer has acted in bad faith, don't hesitate to contact us for a consultation. Let us be your advocate in this challenging time and help you navigate the path to a fair resolution.