Insurance Defense: Handling Bad Faith Accusations
Written by Kristin Lausten
It is difficult to provide customers with insurance services when your company stands accused of being unprofessional and engaging in bad faith handling of insurance claims. Not only does it put a strain on your company’s resources, but it also consumes a lot to time and can harm your business reputation. It is prudent for your insurance business to resolve bad faith claims quickly and as smoothly as possible.
There are many reasons why policyholders lodge bad faith complaints against their insurers. Perhaps the policyholder feels taken advantage of under the terms of the policy or is irritated that their claim has not been fully processed or processed expeditiously. Sometimes policyholders’ claims against their insurance provider are grounded in legitimate causes of action, but there are also many situations where the policyholder’s claim is unfounded, questionable or even fraudulent. Whatever the circumstances may be, it is important that your insurance company fight any bad faith claims that are made against you. When you need help dealing with bad faith allegations, you should talk to an experienced Louisiana insurance defense lawyer.
Genuine Grounds For Bad Faith Claims Against Insurers
There are some legitimate grounds for policyholders to allege that their insurance provider is acting in bad faith, but these circumstances are often deliberate actions taken by the insurance company against the policyholder and their claim. For instance, the following are several acts of bad faith that can form the basis for a legitimate bad faith claim.
- Deliberate delays in processing or paying out the benefits owed to a policyholder for a valid claim under the insurance policy.
- Refusal of the insurance company to pay out a valid claim under the policy.
- Threats made against the policyholder by the insurance company.
- Purposefully misinterpreting the terms of the insurance policy to play to the insurance company’s advantage.
- Refusal of the insurance company to defend a lawsuit for the policyholder in accordance with the insurance policy terms.
- Mishandling the investigation of a claim made by a policyholder.
The commonality of these above acts of bad faith is that they are deliberately meant to impede or prevent fairness under the insurance policy. Insurance companies do have a legal duty of good faith and fair dealing, but there is a difference between being fair under the terms of the insurance policy and the policyholder simply being displeased with the outcome of their insurance claim.
There will be times where policyholders will try to file claims under their policy that the policy does not cover and there are times when claims are rightly denied. Policyholders are not entitled to the outcome that they want if it is not provided for under the insurance policy. The insurance policy is what governs when it comes to handling insurance claims – not the policyholder.
Policyholders who accuse insurance companies of bad faith practices are tenacious and unrelenting. That is why it is so important for insurance companies to deal with bad faith allegations on a case by case basis. In some situations, it might make sense to try and settle the claim, while in other cases the case can be dismissed with minimal motion practice. For the most challenging claims, however, litigation may be necessary. Even though the policyholder making these bad faith allegations against your company is your customer, don’t be afraid to fight back.
Contact An Experienced Insurance Defense Lawyer
Need assistance defending against bad faith claims? You should immediately contact a Louisiana insurance defense lawyer. Together, you and your attorney can fight against the bad faith claims that have been lodged against your insurance company.
The author may be contacted at:
Kristin M. Lausten
New Orleans, Louisiana
This article is provided as an educational service for general informational purposes only. The material does not constitute legal advice or rendering of professional services.