Bad Faith Insurance

You buy an insurance policy and assume that you will be compensated by the insurance company if you suffer a loss. A contract is signed between you and an insurance company -- your insurance policy -- which sets out terms and conditions specifying the amount of coverage or compensation payable to you should you claim a loss or injury. Depending upon your contract, it may cover you against a personal injury or damage to your vehicle or a catastrophic event such as Hurricane Katrina.

Sounds straightforward -- you buy insurance and assume that you will be compensated by the insurance company if you suffer a loss. Unfortunately, this is not always the case. Some insurers will deny your legitimate claim even if they don't have a valid reason to do so. When an insurance company breaches your trust, you feel betrayed. The company is then acting in bad faith.

Generally, these insurers employ tactics that will try to wear you down; they count on you not having any recourse. An insurer may attempt to refuse to pay all or part of your medical bills or delay investigation of your claim for no reason except to hope that you will go away. Other tactics include the following:

• A 24-month limitation on benefits for mental and nervous conditions



• Knowingly applying the wrong legal definition of disability when denying claims



• Purposely targeting high-cost claims for denials



• Misuse of claimants' medical records

It is hard to believe that bad faith insurers can practice bad faith -- until it happens to you. Insurance complaints have increased drastically over the last several years but there is also a positive side to this: public attention has demanded that insurance companies are now held accountable. Thanks in part to the Freedom of Information Act and the Internet, insurers can no longer get away with bad faith insurance practices. More lawsuits against crooked insurers are being fought and won today than ever before.

What You Can Do
Write to your State Department of Insurance. In the U.S., each state regulates insurance companies and every state has its own Department of Insurance website. Once you know the website of your state regulatory agency Department of Insurance, find the right representative and submit a complaint in writing to make sure that your claim is on record.

Keep a record of everything that transpires between you and your insurer, including phone calls. Keep a paper trail. And request copies of your medical records - it is your right.

You can go to small claims court but each state has its own limit - find out first. If your claim is too high for small claims court, you may want to seek legal help.

Click here to send your complaint to a Lawyer through a secure form

Bad Faith Insurance Articles

Good Faith Floridian Claimants are Met with Bad Faith Insurers
Floridians are fighting mad, and most Americans would agree with their reasoning for feeling outraged. Large insurance companies have allegedly requested that Florida residents willingly agree to an extended range of risk in policies provided to them. However, the same insurance companies that entreated its client base to acquiesce to this change have allegedly not decreased premiums as promised at a prior time.

Bad Faith Insurance: Looking Out for Number One - And it isn't You
Freddie and Zohreh Shahrodi know all about what their insurance policy SAYS. It's what their insurer didn't deliver that has the Jefferson County couple up in arms, and battling in court—yet another lawsuit against bad faith insurance.

Bad Faith Insurance: Policy Holders Fight Back, Win Big
Welcome to the new world of bad faith insurance, where you can pretty much expect your insurance companies to nickel-and-dime your claim, try to get out of paying less and in many cases, denying your claim altogether.

Bad Faith Insurance in the News

FEB-25-08: Patsy Bates, a 52-year-old hairdresser, found out she had breast cancer in 2004. She thought she had reliable health care coverage with with Health Net, but it dropped her coverage while she was in the middle of chemotherapy. Bates was left with $129,000 in unpaid medical bills after Health Net retroactively canceled her insurance policy. [NEWS: HEALTH NET CANCELS INSURANCE]

DEC-25-07: A state appeals panel ruled that insurance companies cannot rescind health policies unless they show policyholders purposely lied on their applications. A lawsuit against Blue Shield alleged the company acted in bad faith by taking a man’s premiums but rescinding the insurance when his bills got too high. [NEWS: BAD FAITH INSURANCE]

DEC-19-07: Allstate is racking up $25,000 a day in fines for refusal to turn over key documents in a bad faith insurance lawsuit. The company says it will turn over the documents when the judge agrees to seal them from public view. [WQAD: BAD FAITH INSURANCE]

Nov-30-07: A woman whose baby died after a car accident was awarded $364,000 in her bad faith insurance and breach of contract lawsuit against Shelter Insurance Co. The award included punitive damages. [POST: BAD FAITH INSURANCE]

OCT-23-07: A Morgan County jury has awarded more than $4 million to the plaintiffs in an insurance lawsuit filed against Liberty Mutual. An employee of Solutia and Fluor Enterprises Inc., a maintenance contractor, was killed on the job and Liberty Mutual refused to provide their legal defense. [DAILY NEWS: BAD FAITH INSURANCE]

SEP-18-07: St. Bernard Parish is suing two insurance companies for bad faith insurance alleging the companies paid "astoundingly low" settlements for wind damage to the parish's buildings. The suit seeks a total of $40 million. [WDSU: BAD FAITH INSURANCE]

SEP-13-07: A couple who owned 14 homes damaged by Hurricane Rita has filed a lawsuit against Texas Farmers Insurance and Fire Insurance Exchange for denying part of their claims without adequate investigation. The suit alleges the defendants knowingly violated several insurance codes. [RECORD: BAD FAITH INSURANCE]

SEP-03-07: Around 6,600 insurance-related lawsuits have gone to Federal District Court in Louisiana, following Hurricane Katrina. State Senator Walter J. Boasso is now proposing jailing insurance executives who are found to have acted in bad faith. [TIMES: BAD FAITH INSURANCE]

AUG-29-07: A federal jury found QBE insurance acted in bad faith and ordered the company to pay $8.1 million for damages sustained during Hurricane Wilma. The insurer claimed the hurricane damage did not even meet the deductible. [POST: BAD FAITH INSURANCE]

AUG-23-07: A lawsuit filed in Texas accuses Allstate of violating insurance laws and bad faith rating practices. The suit seeks penalties of $25,000 for each policy that is sold with an increased rate that was rejected by the Texas Insurance Commissioner. [NEWS: BAD FAITH INSURANCE]

AUG-03-07: Insurers often pay only 30-60 percent of the cost of rebuilding a damaged home, even when homeowners have been assured they are fully covered. Court records show insurance companies routinely ignore engineering reports, ask adjusters to lie to customers, and change policy coverage with no explanation. [BLOOMBERG: BAD FAITH INSURANCE]

JUL-12-07: A couple whose home was damaged in Hurricane Rita has filed a lawsuit against Allstate Texas Lloyds alleging bad faith insurance, breach of contract, and violating the deceptive trade practices act. The couple said they were forced to live in a waterlogged home because of the insurance company's actions. [RECORD: BAD FAITH INSURANCE]

JUL-05-07: A doctor filed a lawsuit against Physicians Insurance Company of Wisconsin alleging the company acted in bad faith by not properly acting to settle a malpractice lawsuit. The malpractice suit resulted in a $3.5 million judgment against the doctor. [QC ONLINE: BAD FAITH INSURANCE]

Bad Faith Insurance Legal Help

If you have been denied a legitimate insurance claim, please click the link below to send your story to a lawyer who will evaluate your claim at no cost or obligation.