When an individual purchases an insurance policy, the policy functions on a contract basis between the policyholder and the insurer. The policyholder agrees to pay premium payments to maintain coverage in return for the insurer providing coverage for events that fall in line with the terms of the policy. It is essential for insurance policyholders to carefully review the terms of coverage before signing a contract for any type of insurance policy.
If an insurer fails to uphold its end of a contractor does not honor terms of the policy as required by the contract, the policyholder may have grounds for an insurance bad faith lawsuit against the insurer.
Tips for Dealing With Insurance Companies
Ideally, you should never speak with an insurance company without first consulting an attorney. In some cases, an attorney can simply manage correspondence with the insurer to minimize the chances of pushback and to address specific issues as they arise from a legal standpoint. Having an attorney draft your initial claim letter can be enough to encourage a favorable result.
Include as much information as possible with your initial claim. Include details of the event in question and how it pertains to your coverage. Also, include the amount you are claiming and the justification for that amount. An attorney can help craft a well-worded initial claim that will start the claims process off on strong footing. However, it is vital to remember that paying out on claims is not in insurance companies’ best interests and they generally look for any reasons to deny coverage or only offer lowball settlements. Some insurers simply hope that claimants accept lowball offers out of desperation, and this is not an ethical or legal practice.
When you encounter any resistance from a claims adjuster and believe it is due to procrastination or any type of bias against you or your claim, ask to speak with the adjuster’s supervisor and move up the chain of command to try and resolve your issue. Insurance companies have a legal obligation to process and investigate claims honestly, in good faith, and in a timely manner. Having a documented record of your correspondence with different levels of authority with an insurance company and records of any necessary appeals will also support your case if your issue proceeds to a bad faith lawsuit.
Starting a Bad Faith Lawsuit
If you suspect an insurance company has not handled your claim in good faith, speak with a Kansas City bad faith insurance attorney to discuss your options. In many cases, simply drafting and sending a letter accusing the insurer of bad faith practices is enough to encourage a more amicable dialogue about your claim. The complaint letter should include all the information from your initial claim letter. It should also include the evidence you and your attorney have gathered proving bad faith or examples of bad faith practices.
Denying a covered claim without just cause
Delaying claim processing without just cause
Failing to properly investigate a claim
Failing to uphold company policies for processing and investigating claims
Delaying payment on a claim for an unreasonable amount of time
Attempting to pay far less than what the insurer reasonably owes the claimant
It is not in the insurance companies’ best interests to allow a lawsuit to continue. This is generally more expensive than simply paying out on a claim and can damage the insurers’ public reputation. However, should your claim proceed to the lawsuit stage, remember insurance companies generally have in-house legal teams or keep high-powered law firms on retainer. You should approach such a situation with an attorney of your own. Contact the Wendt Law Firm P.C. to schedule a free consultation with our Kansas City injury lawyers.