Individuals who purchase insurance often expect their insurance company to analyze and examine claims as truthfully as possible. In addition, claims involving the following usually cause policyholders to rely on their insurance provider to process claims responsibly and promptly.
- Damage from wildfires
- Property loss
- Disability benefits
- Car accidents
- Other incidents that are covered by insurance
However, oftentimes, conflicts can still occur. These disputes are usually between insurers and policyholders. It is important to understand that in some cases, an insurance provider may do the following.
- Postpone or significantly delay its investigation
- Deny coverage without a valid reason
- Offer a settlement amount that seems to be significantly lower than the recorded value of the claim
- Request unnecessary or irrelevant information
Being aware of these types of instances is crucial in maintaining your safety during the claims process moving forward.
What Is an Insurance Bad Faith Claim?
As mentioned above, insurance providers have a responsibility to act as fairly and truthfully as possible when working with individuals and analyzing claims. Oftentimes, insurance companies are authorized to:
- Investigate claims
- Request supporting documentation
- Question liability
- Deny claims
An insurance bad faith claim is when an insurance provider fails without good reason in fulfilling its obligations under the provided insurance contract. It is important to understand that not every settlement conflict results in a bad faith claim. Speaking with a legal professional may help individuals better comprehend the difference between a just and unjust insurance claim.
Common Examples of Potential Bad Faith Conduct
Individuals should understand that every claim presented depends on its own facts. In addition, policyholders may occasionally report the following situations.
- Excessive delays in investigating or processing claims
- Failure to respond to communications within a reasonable amount of time
- Repeated requests for information that has already been given
- Rejecting claims without completing a fair investigation
- Refusing to explain the basis for a denial
- Offering settlement amounts that appear unsupported by the available evidence
- Ignoring medical records, repair estimates, or expert reports
- Failing to conduct a prompt evaluation after receiving necessary information
The circumstances presented above do not automatically establish bad faith, but they may require a closer review by an personal injury attorney who is familiar with insurance conflicts.
What Does "Lowballing" Mean?
The term “lowballing” is often used to describe a settlement proposal that seems significantly lower than the overall value of the documented or recorded loss. The following situations may be referred to as “lowballing”.
An insurance provider
- Offering less than repair estimates for property damage
- Valuing a totaled vehicle below comparable market prices
- Disputing medical expenses despite supporting records
- Offering substantially less than claimed damages without providing a clear explanation
Delays Can Sometimes Create Additional Problems
Victims should understand that delays may create additional challenges or problems during an already difficult time. Examples of delays that can be avoided may include but are not limited to the following.
- Waiting months without significant updates
- Missing internal deadlines without explanation
- Delaying inspections
- Postponing payment after liability has been established
- Continuing to request documents that have already been submitted or requested in the past
- Failing to make coverage decisions within a reasonable period of time
For individuals who may be experiencing the following, facing delays may make their lives significantly worse in the long run.
- Vehicle repairs
- Medical bills
- Home restoration costs
- Lost income
In addition, California law usually requires insurance providers to:
- Acknowledge communication
- Investigate claims as soon as possible or within a reasonable amount of time
- Provide timely responses during the entire claims process
These steps are crucial in making sure that individuals feel supported and cared for during a challenging time in their lives.
Types of Insurance Claims That May Involve Bad Faith Issues
The following are types of insurance claims that may involve bad faith issues.
Auto Insurance
Conflicts may involve:
- Vehicle damage
- Total loss valuations
- Uninsured or underinsured motorist claims
- Medical payments coverage
- Liability defense obligations
Homeowners Insurance
Claims involving:
- Fire damage
- Smoke damage
- Water losses
- Theft
- Wind damage
- Wildfire claims
Commercial Insurance
Businesses may experience conflicts involving the following.
- Property losses
- Business interruption
- Equipment damage
- Liability coverage
Disability Insurance
Disagreements may sometimes occur over the following.
- Medical evidence
- Continuing disability reviews
- Benefit calculations
- Claim denials
Life Insurance
Potential disputes may involve:
- Coverage determinations
- Beneficiary issues
- Policy interpretation
- Claim investigations
Each type of policy contains different contractual obligations and legal standards.
Legal Guidance
Victims who have been involved in an accident should consider seeking legal guidance and support to better understand their rights moving forward with their personal injury claims. Oftentimes, insurance conflicts can become extremely challenging and complicated for individuals who are going through an already difficult time. A qualified personal injury attorney may be able to review the facts of your case, speak with insurance companies, help you receive compensation, and explain California laws that may apply to your specific situation.
Victims should understand that determining whether an insurance provider acted with reasonable care is very difficult and requires extensive examination and evidence. A legal professional can help victims understand the difference between a just and unjust insurance claim to ultimately allow individuals to feel supported and cared for throughout the entire legal process.
How KAASS LAW Can Help
KAASS LAW is determined to help victims who are suffering from the aftermath of an accident. Oftentimes, insurance companies can cause additional stress during an already challenging time for victims and their families. Understanding the way that these companies operate can help victims move through the claims process more peacefully.
The personal injury attorneys at KAASS LAW may be able to evaluate insurance policies and other information that may be relevant in determining the outcome of your claims. Our legal team understands that every case is unique and no situation or accident is the same. If you or a loved one has been involved in an accident, call KAASS LAW for a confidential consultation.