You pay for insurance, and like anyone else, you expect your carrier to provide you with the requisite benefits. Bad faith insurance is when your insurer is unreasonable or refuses to pay claims or protect you from claims. Essentially, the insurer isn’t doing his or her job.
There are a few duties each insurance carrier owes to its clients. These include things like investigating accidents or protecting their clients against lawsuits. Here are five to remember.
1. A duty to hold to your contract
A contract is binding whether you’re a person or a business. Breaching a contract is enough to lead to a lawsuit.
2. The duty to investigate
Insurers are required to investigate situations that could lead to a claim, like a car crash or house fire. If the insurance company doesn’t complete an investigation, you may be able to claim that your insurer failed to meet its duty to you.
3. Failing to settle for a fair amount
Insurers are meant to attempt to settle claims for a reasonable amount. If it’s found that they’re not settling in the hope of taking someone to court to be relieved of liability or in order to pay less, that’s a bad-faith situation.
4. Failing to pay a settlement
Failing to pay a settlement agreement is a major no-no. If there is a settlement agreement or judgment, not paying may constitute bad faith and lead to further consequences for the insurance carrier.
5. Refusing to or failing to defend you
One reason people have insurance coverage is to prevent them from facing liability directly. Insurers need to defend policyholders, and failing to do so could be a violation of their duties to their clients.
If you’re a victim of an insurance company, you can make a bad faith claim. A good claim can help you recover your losses.