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Signs your insurer may be acting in bad faith

On Behalf of | Oct 8, 2024 | Insurance Disputes

Insurers may deny or delay paying out claims for various legitimate reasons. These can include insufficient documentation or failing to file your claim on time. However, there are also instances where an insurance company may act unfairly or in bad faith.

Bad faith insurance happens when an insurer uses unreasonable tactics to avoid or minimize the claim payout as much as possible. Below are four red flags that your company may be a victim of bad faith insurance practices.

Excessive or unreasonable delays

Insurance companies should process claims promptly. New York does not impose a specific deadline for when insurance companies need to settle claims. However, insurers generally need to accept or reject your claim within 15 business days after you submit all the required documents.

Insufficient claim investigation

Once you file a claim, the law requires your insurance provider to conduct a thorough investigation. Insurers acting in bad faith may not investigate the claim or incident exhaustively. This may lead to claim denials or increased liability for your business.

Bad faith tactics insurers may do include:

  • Not informing your business of required documentation
  • Failing to inspect the site of the incident or damaged property
  • Not contacting other relevant parties
  • Skipping steps during the investigation

Refusal or failure to communicate

You can expect an insurer acting in good faith to respond to reasonable methods of communication in a timely manner. If your insurance policy provider refuses to accept your phone calls or emails, they may be trying to delay processing your claim.

Misinterpreting policy language

Insurance companies know business owners may need to fully understand their policies. As such, insurers may misrepresent facts or even misinterpret the law to hide critical information and deny a legitimate policy claim without justification.

Review your policy with a legal professional

If you suspect your business is experiencing bad faith misconduct from your insurance company, it is prudent to review your policy. Make sure you understand the policy terms and that your claims are valid.

It also helps to consult an experienced legal professional. They can help you prepare a response to your insurer and document their misconduct to help your company hold insurers accountable and ensure you receive your rightful claim payout.

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