Policyholders give insurance companies billions of dollars every year in the form of premiums to protect them from the risk of paying huge out of pocket expenses after an injury. But the sad fact is that many don’t receive anything when that risk becomes a reality. Insurance companies are notorious for denying, delaying and refusing to pay valid claims, solely to keep premiums and increase their bottom lines. Some of the biggest offenders are the larger insurance companies. Sadly, these companies have been known to deny valid claims in an attempt to boost profits, reward employees who successfully deny claims and engage in fraud to avoid paying claims. Long term care insurance companies are arguably the worst when it comes to bad faith tactics. It should be pointed out that, in some cases, insurance companies make money when they don’t pay claims and that they will do anything to avoid paying, because they know– if they wait long enough– the policyholders will eventually die.
The truth of the matter is that an insurance company has a duty to handle claims promptly, reasonably and in “good faith and fair dealing.” That basically means that your insurance company must adjust your claim by either paying it or denying it within a reasonably prompt time. Also, they must cooperate with you regarding the claim by responding to your letters and phone calls. And if they deny your claim, they must tell you in writing precisely why they are denying the claim specifying each contract term or provision upon which it relies. On top of that they must attempt to find a basis to pay the claim rather than find reasons to deny it. Lastly, they must, as stated in the title, “play fair”. That does not mean they have to pay your claim if they have a good reason to deny it. If they don’t play fair then you will have to prove that the insurer injured you by not paying your claim when it should have. If you feel you have been treated unfairly by an insurance company and would like to recover a bad faith claim, please contact our experienced bad faith insurance law attorney for a free consultation.