Types of Insurance Bad Faith, Greater Tampa Bay Area Insurance Bad Faith Attorneys

There are many ways that an insurance company may act in bad faith, thus breaching its contract with its insured. Florida law states that an insurance company may be liable for bad faith if “it does not attempt in good faith to settle claims when, under all of the circumstances, it could and should have done so, had it acted fairly and honestly toward the insured, and with due regard for the insured’s interests.” The word “all” virtually ensures that every bad faith action will see a jury trial, because the law requires that all circumstances be taken into consideration when determining whether an insurance company acted in bad faith.

There is more to bad faith than denying coverage or making a settlement offer that is lower than what you believe you are owed. While either of these actions could constitute bad faith on the part of your insurance company, there are many other manners of demonstrating bad faith. Below are some of the typical ways that an insurance company can exhibit bad faith in the handling of your claim:

Your insurance company has a legal duty to defend you in the event that a lawsuit is brought against you that is based on allegations or facts that are covered under your insurance policy. For example, if another driver files a lawsuit against you as the result of an automobile accident, alleging that you were at fault, your automobile insurance company has the duty to defend you against the lawsuit. It does not matter whether or not it has been determined that you were at fault - in some cases you may not be - because the lawsuit is based on allegations that would fall under the terms of your policy (i.e., something that you did while driving), your insurance company is required by law to defend you. If your insurance company is failing or refusing to defend you in a lawsuit that is based on coverage set forth in your policy, your carrier may be acting in bad faith.

Insurance companies are required by law to meet certain requirements when denying your claim or offering you less than the full amount of the claim. These requirements are in place to help ensure that your carrier deals fairly and honestly with you. Insurance companies may still attempt to avoid payment on valid claims by engaging in deceptive practices either at the time the policy is written or when processing a claim. Any deceptive practices on the part of your insurance carrier constitute bad faith and are the basis for a bad faith action.

Below are some of the typical deceptive practices that insurance companies may use to avoid payment of your claim:

Your insurance company might attempt to misrepresent pertinent facts or terms on your policy when it is written. This includes failing to disclose exclusions of any type or failing to ensure that you are clear regarding what is covered, what is not covered and what your policy limits are. All policy exclusions and other pertinent terms of your policy must be clearly visible on your contract and understandable as to their meaning by a reasonable person. If your policy is not clearly written with pertinent information that is openly visible, the insurance company could be engaging in deceptive practices. If you believe that your policy has not been written in the manner you were told or led to reasonably believe, you may have an action for bad faith against your carrier.

2. Policy Alteration

Your insurance company may attempt to either deny your claim or make a settlement offer that does not cover the full amount of a claim, and use as its basis language that was not in the contract at the time you purchased it. In either instance, your carrier is required to provide you with a copy of the language on which it bases its decision, but it may use a policy that has been altered either without your consent or knowledge. If the policy language being used by your carrier has been altered and you were not informed or asked about the change, your insurance company may be acting in bad faith.

The purpose of any insurance policy is to help protect the financial interests of those it insures. This means that when you submit a claim, your insurance company knows you have experienced something that can be, or is, a significant financial hardship. Unfortunately, the insurer may attempt to take advantage of your difficult position by unreasonably delaying or stalling its investigation, processing, or payment of your claim. Your carrier might hope that if it delays long enough, financial pressures will ultimately force you to accept a smaller amount to settle your claim than you would otherwise be entitled to receive. An insurance company does have the right to deny coverage if you have failed to perform the duties that you have to it under your contract, or if your policy does not provide coverage for the event upon which your claim is based. However, it must make a prompt and reasonable investigation and cannot deny coverage without good cause or by inventing reasons for doing so. If you believe that your insurance company is unreasonably delaying or stalling the handling of your claim, you could have an action against it for bad faith.

Below are some common tactics used by insurance companies to delay or stall the processing, investigation, or payment of your claim.

1. Impossible Conditions

Your insurance company may require that you meet certain conditions prior to settling your claim. Some conditions are entirely reasonable, such as asking that you submit proof of payment before it reimburses you. However, an insurance company may also attempt to avoid payment of a valid claim by demanding that you meet conditions that are either unreasonable or impossible for you to meet.

2. Unreasonable Expectations

Your insurance company will have certain requirements, such as documentation, that it can reasonably expect of you in order for it to properly and thoroughly investigate and process your claim. However, it might hope that burdensome and often repetitive expectations will place you in a financial position that forces you to accept less than you are entitled to for your claim. It might demand that you provide receipts that are difficult or impossible to locate, ask for excessive documentation or require multiple appointments with estimators in hope that you will finally give up and accept a reduced settlement amount.

3. Multiple Adjusters

Your insurance company may attempt to delay payment of your claim by passing it through the hands of multiple adjusters. There may be a valid reason for any change of adjuster, and such a change is not by itself the basis for a claim of bad faith. However, the insurance company may shuffle your claim from adjuster to adjuster, simply to delay the processing of your claim, or possibly because it may result in a lower settlement being offered once the “right” adjuster has your claim. Each new adjuster might ask for documentation that you have already provided, or ask for additional documents that you were not initially asked to provide.

The Bad Faith Insurance information offered by the greater Tampa Bay area Bad Faith Insurance Lawyers and contained herein, regarding Florida Bad Faith Insurance statutes and Pasco, Pinellas, and Hillsborough County, Florida Insurance Dispute claimants' rights, is general in scope. No denied Insurance Claim attorney / client relationship with our greater Tampa Bay area Insurance Bad Faith attorneys is hereby formed nor is the information herein intended as formal legal advice. See terms of use. Please contact the greater Tampa Bay area Insurance Dispute Lawyers toll-free at 1-800-4-INJURY regarding your specific claim if your insurance claim was denied in Dade City, City of New Port Richey, City of Port Richey, City of San Antonio, Town of St. Leo, Zephyrhills, Bayonet Point, Beacon Square, Blanton, Crystal Springs, Dade City North, Elfers, Holiday, Hudson, Jasmine Estates, Lacoochee, Land O' Lakes, New Port Richey East, Odessa, Saint Joseph, Shady Hills, Trinity, Wesley Chapel, Wesley Chapel South, Zephyrhills North, Zephyrhills South, Zephyrhills West, Belleair, Belleair Beach, Belleair Bluffs, Belleair Shore, Clearwater, Dunedin, Gulfport, Indian Rocks Beach, Indian Shores, Kenneth City, Largo, Madeira Beach, North Redington Beach, Oldsmar, Pinellas Park, Redington Beach, Redington Shores, Safety Harbor, Seminole, South Pasadena, Pete Beach, St. Petersburg, Tarpon Springs and Treasure Island, Florida.