Imagine you were in a car accident. While the accident wasn’t your fault, the driver who hit you was uninsured. You experienced some injuries that resulted in you spending time in the hospital. You start racking up hospital bills and you send your claim to your insurance company. Instead of taking care of your claim, the insurance company pushes back. They start questioning your bills and you feel like they aren’t treating your case appropriately. In the insurance world, this is known as “bad faith”. In this post, we’ll walk through what is the difference between good and bad faith when it comes to insurance claims.
Good faith vs. bad faith
Insurance policies are known for being a “pay for promise” relationship. You pay them a premium every month and they promise to provide you with insurance protection if you are ever in an accident. Your insurance company has a responsibility to negotiate your claim in good faith.
According to the law dictionary, the term bad faith means “an intentional, dishonest act by not fulfilling legal or contractual obligations.” Basically, what this means is that a person or a company is knowingly choosing to disregard the terms of a contract you both have agreed to. While the example above is in regards to insurance companies, bad faith can be applied to any relationship where a legal contract is in place. However, most of the time the term is used in reference to insurance companies.
Bad faith does not mean only mean that you disagree with the way your insurance company is handling your claim. Just because you believe you are entitled to more compensation does not mean they are handling your claim in bad faith. However, if the company refuses to provide any reasons for why they are giving you a low settlement or if at anytime the insurance adjuster says or does anything that could be construed as an improper way to handle a settlement, this can be considered bad faith.
What should you do if you believe there is bad faith?
If you believe your insurance adjuster is working in bad faith, the easiest thing for you to do is to bring it up to him or her in conversation. Let them know you believe they are negotiating in bad faith and judge their reaction. They might not realize they are doing anything wrong and by just bringing it to their attention, you could fix the situation.
If that does not work, you should put your accusation in writing. When writing a letter to an insurance company, you’ll need to specifically refer to what you believe is bad faith. Generally, submitting your request in writing will get their attention and they should take action pretty quickly. If you don’t want to deal directly with the insurance company, you could always reach out to a bad faith litigation lawyer trusts. They can make sure you get what is owed to you.
You never want to be in a situation where you are fighting with your insurance company – especially not right after you’ve been in an accident. If you believe you are being treated with bad faith, speak up. You have the right to be heard and to have all of your claims negotiated in good faith.