| Most insurance policy holders haven't heard of bad | | | | However, insurance companies have the right to |
| faith and so don't even think about challenging their | | | | deny your claim if you haven't lived up to your end |
| denied insurance claim. But it happens every day in | | | | of the contract/policy, if your claim isn't covered by |
| the insurance industry. | | | | your policy or is fraudulent. |
| Yes, there are many responsible and ethical insurance | | | | How to Dispute Insurance Claim Denial |
| adjusters out there, but the majority of them are | | | | If you still feel you are in the right after having |
| extremely overloaded with claims. They simply can't | | | | reviewed your insurance policy, collect all of the |
| handle every single one of them according to their | | | | correspondence you've had with your insurance |
| company's or the Department of Insurance's | | | | company and other pertinent documentation. Write a |
| guidelines. | | | | letter and send it certified mail to the Director of |
| After a while, handling claims "in bad faith" becomes | | | | Claims of the insurance carrier you deal with citing |
| routine. And since most people have no idea what | | | | the pertinent points of the policy and demonstrating |
| constitutes bad faith, they do nothing to fight their | | | | that their insurance claim denial of benefits is |
| insurance claim denial. | | | | unreasonable. Also write the Commissioner of the |
| That's why it's so important to understand the | | | | Department of Insurance in your state and ask them |
| theory behind bad faith so you can protect your | | | | for a review and assistance in the matter. |
| "rights of insured". | | | | If that doesn't work, take your policy and |
| What Is Bad Faith? And What Are My Rights of the | | | | documentation to a qualified insurance attorney. He |
| Insured? | | | | or she should be able to determine after a review of |
| An insurance policy is a contract between you (the | | | | the facts whether or not your insurance company |
| Insured) and your insurance carrier (the Insurer). As | | | | has violated your rights of insured and committed |
| an insured, or policyholder, you are bound to the | | | | bad faith. |
| terms and conditions set forth in the policy. You also | | | | How To Fight Back |
| have certain duties when it comes to filing a claim. | | | | When an insurer commits bad faith on a denied |
| However, the insurer is also bound by the terms of | | | | insurance claim, you have three options: 1) negotiate |
| the policy and has certain obligations to meet. So in | | | | an acceptable settlement with the insurer, 2) do |
| exchange for your monthly premium, the insurer | | | | nothing and give up, or 3) sue the insurer. A vast |
| agrees to provide the coverage set forth in the | | | | majority of people unfortunately choose to do |
| policy. This contract requires that it acts in "good | | | | nothing and give up. |
| faith" toward you. | | | | But often when an insurance attorney becomes |
| When an insurer unreasonably withholds the benefits | | | | involved, an insurer will take the claim much more |
| of the policy from its insured, it is considered to be in | | | | seriously and try to correct its earlier bad faith |
| "bad faith" and is not upholding your rights of insured. | | | | direction in order to minimize the amount of the claim |
| Insurance attorneys know that insurers attempt to | | | | and any punitive damages. Typically, even when it is |
| deny or underpay claims for any reason they can. To | | | | necessary to sue an insurer for bad faith, the case is |
| determine whether an insurer is acting in good faith, | | | | often settled before the trial. |
| the court must determine whether or not their | | | | Why Do They Commit Bad Faith? |
| conduct is "reasonable". To prove bad faith, you only | | | | There is a good financial reason for insurance |
| have to show that the insurer failed to honor the | | | | companies to unjustly deny claims. Because very few |
| contract and had no reason not to pay what was | | | | policy holders dispute an insurance claim denial, |
| due. | | | | insurers save a lot of money. |
| Examples in Insurance Claim Denials | | | | Here's how it works: Let's say that an insurer denies |
| There are many ways insurance companies commit | | | | 100 claims. Of these 100 claims, 95 go unchallenged |
| bad faith and violate the rights of the insured: | | | | and disappear while five policy holders decide to |
| Failing to promptly and thoroughly investigate a claim; | | | | dispute their insurance claim denial. |
| Unreasonable delay of payment of benefits; | | | | Of these five, the insurer reverses its denied |
| Unreasonable insurance claim denial; | | | | insurance claim decision on four of the claims. But it |
| Using unreasonable interpretations in translating policy | | | | continues to refuse coverage on the fifth claim. |
| language; | | | | The fifth claimant then files a lawsuit for bad faith |
| Refusing to settle the case or reimburse you for | | | | and is awarded punitive damages against the insurer. |
| your entire loss. | | | | Even if this claimant gets millions of dollars, the |
| If an insurance claim denial is considered | | | | insurance company still saved millions by not having |
| "unreasonable" and is demonstrated to be dishonest, | | | | paid the other 95 denied insurance claims that were |
| deceptive or fraudulent, a judgment may be obtained | | | | not disputed. |
| and punitive damages awarded as well as | | | | And that, in short, is why they do it and how they |
| compensation for the actual loss under the policy. | | | | get away with it. |