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Insurance Bad Faith: What is it?

Bad Faith is a legal term referring to an insurance company’s attempt to refuse payment on a policyholder’s legitimate claim. People buying insurance coverage for long term disability or other needs naturally assume their insurance company will act in good faith when a claim is made. Unfortunately they may never suspect that bad faith may often be the response.

Why Insurance Companies Respond in Bad Faith:

Insurance companies are large corporations whose primary interest is safeguarding and increasing profits for shareholders. When you make a claim to an insurance company, it is most beneficial for them to deny your claim, even if it is valid. Insurance companies have been found to routinely commit acts of bad faith, including such tactics as:

  • Delaying payment of a claim for as long as possible
  • Confusing policyholders with obscure clauses and lengthy claims processes
  • Canceling policies requiring expensive treatment
  • Awarding bonuses to employees who successfully deny claims

Bad Faith Happens

The practice of bad faith in response to your insurance claim can be devastating, resulting in the loss of your regular income, loss or foreclosure of your home, or the depletion of savings. Policyholders can be, and have been, financially and emotionally ruined by the outcome of a bad faith insurance claim.

Can You Take Action Against Insurance Bad Faith?

Every state has laws banning bad faith insurance practices, but even when fined by the courts, bad faith breach of contract continues because large insurance companies are equipped with legal resources prepared to fight the claims of their policyholders.

If your insurance company has acted in bad faith, work with a law firm experienced in fighting against big insurance companies. The team at Sokolove Law will fight on your behalf to get the benefits you are rightfully owed. Call today at 877-822-8214 and speak with one of our attorneys who specialize in bad faith cases, or fill out the form on this page to request a free no-obligation legal consultation.

Insurance Bad Faith: What is it? was last modified: December 28th, 2016 by Sokolove Law