Examples of Bad Faith by Insurance Companies

Examples of bad faith by an insurance company may include misrepresenting your policy, denying your claim without a valid reason, or failing to properly investigate your case. Bad faith means the insurer treated your claim unfairly and failed to deal with you honestly

You may already be dealing with pain or lost income, or trying to repair damage to your home or car. Bad faith dealing doesn’t just make your claim process harder than it should be; it’s also illegal. When an insurer is acting unjustly, an attorney can help you hold them accountable. 

Our Kansas City ERISA Long-Term Disability lawyers have recovered millions of dollars in awards and settlements for injured victims. When you’re hurt, our team is on your side. Call today to schedule your free, no-obligation consultation and tell us what happened.

Unreasonably Delaying Investigations or Payments

An insurance company has a duty to handle claims promptly. When it instead slows down its investigation or delays your payment without a good reason, it may be acting in bad faith.

This can leave you struggling when you need help the most.  

In many cases, the insurance company has the information it needs, but still postpones action to pressure you into accepting less. Unreasonable delays can violate state insurance laws and the terms of the policy itself. 

Denying a Valid Claim Without a Clear Reason

You are entitled to understand why your claim was rejected and what policy language the company based its decision on. An insurance company may be acting in bad faith if it denies your legitimate claim without providing a reasonable explanation. 

A vague denial may be a sign that the company is avoiding its obligations. In some situations, the insurer may reject your claim without reviewing all of the facts or may rely on strained interpretations of the policy. When this happens, legal action may be necessary.

Failing to Properly Investigate a Claim

Before denying a claim, an insurance company is expected to conduct a fair and thorough investigation. Instead, they may use an inadequate investigation to justify denying coverage or reducing the amount owed. 

Insurance companies can’t look for reasons to reject a claim while ignoring information that supports your right to compensation. When a claim is not properly investigated in good faith, you may be denied the benefits you deserve. 

Misrepresenting Policy Terms or Coverage

Insurance companies must be honest about what a policy covers as well as how they handle claims. Misrepresenting policy details can amount to bad faith. For example, an adjuster may wrongly tell you that certain damage is excluded when the policy actually provides coverage. 

Policyholders rely on accurate explanations when making important decisions after an accident, injury, or loss. When an insurance company provides false or deceptive information about coverage, it may be violating both the law and its duty of good faith.

Offering Far Less Than a Claim Is Worth

A lowball settlement offer can be a sign that an insurance company is acting in bad faith. Insurers sometimes make unreasonably low offers to pressure policyholders into settling before they know the full extent of the damage or injury. 

This tactic can leave you without enough money to cover medical treatments and other damages. Insurance companies are expected to evaluate claims fairly and in good faith. When they intentionally undervalue a valid claim, they may be held responsible for the harm they cause.

Ignoring Communication Attempts

Insurance companies are expected to respond to policyholders within a reasonable time and keep them informed about the status of their claims. Repeatedly ignoring your phone calls and other communication attempts can be a form of bad faith.

They may use this tactic to frustrate you and discourage you from continuing to pursue benefits. In some cases, the insurer may fail to request needed documents promptly, then blame the delay on you. A company that refuses to communicate may be violating legal duties imposed by state law and ERISA regulations.

Canceling or Threatening Cancellation to Avoid Paying a Claim

In some situations, insurers may use threats of nonrenewal, cancellation, or premium increases to intimidate claimants into dropping a claim or accepting less than they deserve. These intimidation tactics are unfair and illegal. 

An insurance company may not cancel a policy or threaten cancellation simply to avoid paying your valid claim. If your insurer uses cancellation or similar threats to escape its obligations, reach out to a lawyer. In some cases, you may need an ERISA attorney.

Get Help With a Bad Faith Insurance Case

Unexplained delays, intimidation tactics, and pressure to accept lowball settlements may all constitute bad faith by insurance companies. While insurers may deny claims for legitimate reasons, treating a claimant unfairly is against the law. Get the legal help you need. 

Our attorneys at Kevin McManus Law have over 60 years of combined legal experience, protecting the rights of injured individuals. Call today for your free consultation.