Insurance Company Bad Faith
Insurance Companies: Friend or Foe?
Insurance, whether it is car, homeowner, renters, or some other type, is meant to give you peace of mind that should something unexpected happen, you are covered financially. Year after year, you uphold your end of the contract by paying premiums with the expectation that when the time comes to make a claim, your insurance company will uphold theirs. Unfortunately, that is not always the case. Insurance companies are in the business of making money. The more money they pay out and the faster they pay it, the less they have to provide to their shareholders and CEO. This pressure to be profitable often leads to insurance companies employing various tactics to avoid upholding their contractual obligations
The good news is that you have options to fight back. When an insurance company misrepresents a policy term, denies a legitimate claim, fails to properly investigate, or displays other inappropriate behavior toward a policy holder, it is acting in “bad faith.” In Arizona, all insurance policies have an “implied covenant of good faith and fair dealing.” This means that when you file a claim, the insurance company must, among other things, treat you respectfully and consider your interests on the same level they consider their own; however,
While you don’t have the right to decide what you should be paid, you have the absolute right to be treated “fairly” in the claims process. “Unfair Claims Settlement Practices” are generally defined in Arizona Revised Statutes, Title 20 §20-461 and include:
- Lying about facts or policy provisions
- Not acting reasonably or quickly in response to communications
- Not investigating promptly
- Refusing to pay claims without conducting a reasonable investigation
- Not making a good effort to quickly and fairly settle claims when liability is clear
- Forcing insureds to file suit to get what they are owed
- Trying to settle a claim for less than a reasonable person would think they are entitled to
- Altering documents to try to force settlement
- Delaying settlement under one portion of the policy (like property damage coverage) to force settlement under another portion of the policy (like bodily injury)
- Not promptly providing a reasonable explanation for denial of a claim or a bad offer
The point of insurance companies denying, delaying, and devaluing claims is to wear you down. They have all the time in the world to spend doing nothing else; however, you have a life that, presumably, you want to get back to living. Trying to fight the insurance company is a huge undertaking on top of caring for yourself, your family, your job, your bills, and everything else you have going on. The insurance company knows this and is well aware that when they deny a claim, a certain percentage of people will just give up.
The single most important thing you can do when your insurance company is in breach of its contractual obligations is to hire an experienced insurance bad faith attorney. This is especially important if the potential value of your claim is very high because the insurance company will have a very high interest in paying you a lot less than the full value you actually deserve. Hiring a lawyer does not necessarily mean you will be filing a lawsuit, which is often expensive and time consuming. In most instances, a lawsuit is only filed as a last resort when all other avenues have been exhausted.
If you are battling your insurance company, choose to “Fite” back. Fite law group knows the process and pitfalls of dealing with insurance claims, and can advise on how best to handle your specific situation. Call us at 602-368-1869 for a free evaluation of your case. Hate talking on the phone? Text us at 480.688.7544 to set up a virtual appointment.