When you believe that your insurance company isn’t negotiating in good faith, do you know your options? In the insurance industry, sometimes key phrases commonly used can make adjusters sit up and take notice. When you find yourself negotiating a settlement with your insurance company (for example, for part of your uninsured or underinsured motorist coverage), bad faith can be of these commonly used phrases.
Due to the fact that your policy is a paid-for guarantee from your insurance company that they are obligated to provide you with insurance protection, the insurance company has an obligation to provide your protection, and also to settle and negotiate claims, in good faith.
Third-party insurance companies also have a duty of good faith toward an injured person, but that obligation is much less than the obligation to you by your own company. A bad faith claim against a third party’s insurance company only arises if the company, through its adjuster, has engaged in outright fraud, lies, or has interfered with your ability to pursue a claim (examples include withholding evidence, tampering with a witness, etc).
What is good faith?
Good faith is the basis of all honest, open negotiation. When it pertains to a customer seeking a settlement with an insurance company, it means that all the facts are on the table and both parties are working honestly to reach a fair settlement. This is important because your insurance company has an obligation, by law, to act in good faith and fair dealing. You are entitled to the protection for which you have paid. Your insurance company has an obligation to negotiate and settle your claim in good faith.
What is bad faith?
Bad faith is when an insurance company does not act openly and honestly. Bad faith can happen when your insurance carrier looks for ways to escape its obligation to you. In this sense, bad faith can be considered fraud.
What are some examples of bad faith?
Laws regarding bad faith vary from state to state, but there are some common elements to all as you will see in the following list:
- Failure to share pertinent information with you
- Failure to thoroughly investigate your claim
- Failure to investigate your claim at all
- Failure to acknowledge your claim in a timely manner
- Failure to settle your claim in a timely manner
- Failure to pay you the full compensation that is due
Bad faith claims involving insurance claims can be complicated. Insurance companies have a distinct advantage over clients in terms of knowledge, experience, and resources.
What are my options?
If you believe that your insurance company is acting in bad faith, the most important thing you can do is document everything. Keep accurate track of all conversations you have with your adjuster. Write down the time and dates of all phone calls, emails, or letters. Summarize what you talked about, and how the adjustor responded. If your claim is denied, ask the adjuster to send you a letter detailing the decision. You can also send a letter directly to the insurance company informing them that you believe the adjuster is negotiating in bad faith.
Call us for a consultation
If you believe your insurance company hasn’t negotiated in good faith, your next step is to get professional legal help. At Vinson Law, we have extensive experience negotiating with insurance companies and other entities on behalf of our clients.