Insurance companies make the most money when policyholders don’t require coverage and don’t take on major liability. If someone with car insurance causes a crash, the insurance company will have to pay for the property damage and injury related losses of the people involved in the wreck, which is one reason why someone’s driving record plays a major role in the amount they pay for coverage.
For homeowner’s insurance, location, age and the condition of different systems can all influence how much coverage costs because they impact the likelihood of a major claim. When policyholders negotiate an appropriate amount of coverage and pay their premiums, they should be able to trust that the insurance company will abide by that arrangement in good faith.
Unfortunately, bad faith insurance practices, intended to deny people the coverage that they’ve purchased, are quite common. Many people don’t recognize bad faith insurance until after they have settled a matter and have few options for legal recourse. What are some of the warning signs of bad faith insurance practices?
A refusal to communicate
Stonewalling or completely shutting down communications is a common negotiation tactic employed by insurance adjusters. They may send the written notices required by state law and may otherwise refuse to communicate directly with the policyholder, the claimant or the professionals providing services that the policy should cover. When an insurance professional refuses to return calls and negotiate with those requiring coverage, their actions are a warning sign that the company won’t handle the matter in good faith.
A significant delay in communications
The insurance company should acknowledge the early claim request and send out formal paperwork for someone in need of coverage. The company should also provide a timely response after reviewing the documentation and paperwork submitted as part of the claim in accordance with Louisiana state laws. The longer it takes the insurance company to provide official paperwork or approve the claim itself, the more likely they are to continue acting in bad faith by delaying a payout as well.
A fast but low settlement offer
Many insurance adjusters are happy to offer a settlement because they know the company won’t have liability after they issue that check. They count on people being eager for financial support and unaware of the long-term costs of their claim when offering a low settlement offer. Anyone who believes that the insurance company will try to trick them or manipulate them into accepting less than they deserve may need to bring in outside help to negotiate on their behalf and possibly educate them about their rights when dealing with the insurance company.
Being able to recognize warning signs of bad faith insurance is of the utmost importance for those hoping to fight back against unscrupulous insurance practices and to recoup the amount of compensation that they’re rightfully due.