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Why Do Insurance Companies Act in Bad Faith?

By Dallas Personal Injury Attorney on April 12, 2021

Insurance adjusters are paid to focus on their company’s bottom line, and it is not in the company’s best interests to make you a high settlement offer. It is common practice for insurers to employ a variety of tactics to minimize payouts or avoid them altogether. For example, an insurance adjuster might make a lowball settlement offer, hoping you will accept, so your claim can be put to rest with the lowest possible price tag to the company.

It is critical that you speak with a lawyer to determine if you have been a victim of bad faith.

What Is Insurance Bad Faith?

When an insurance company, either intentionally or through negligence, mishandles an accident victim’s claim by failing to fulfill the obligations of their contract, it acts in bad faith. In many cases, bad-faith practices involve delaying, confusing, or complicating the process, until the policyholder finally gives up on pursuing the claim.

When an insurance company fails to uphold its duty to a policyholder, deliberately or not, it is actually illegal. Examples include:

  • Making unreasonable delay in investigating a claim
  • Failing to investigate a claim thoroughly and promptly
  • Misrepresenting the facts of a case
  • Misrepresenting policy language or law to the policyholder
  • Failing to disclose the existence of coverage
  • Failing to disclose a filing deadline
  • Failing to provide the paperwork needed for a timely filing
  • Offering less money for a valid claim than it is worth
  • Failing to provide adequate justification for denying a claim
  • Refusing to pay a valid claim
  • Compelling a policyholder to pursue litigation to recover compensation available under a policy
  • Making threatening statements to a policyholder or a third party filing a claim

What Should You Do if You Suspect Insurance Bad Faith?

If you suspect your insurance company is acting in bad faith, the best thing to do is to speak with an experienced Dallas insurance bad-faith lawyer as soon as possible. Our legal team may be able to help you prove your claim is valid and encourage your insurance company to cooperate. If your insurer continues to act in bad faith, we can build a strong lawsuit based on the evidence and go after the company in court.

To recover compensation in a bad-faith insurance claim, you must show that the insurance company’s conduct was unreasonable or egregious, and that the company was aware of it. Insurers can be held liable for making misrepresentations about the claim, coverage, or policy, or unreasonable delays in processing and paying claims. Besides paying out on your legitimate claim, the insurance company may be forced to pay you punitive damages.

At The Lenahan Law Firm, we have a history of getting success for our clients. We know insurance companies are not on your side, and the less money they pay you, the more profit they make. If you have been subjected to bad-faith insurance practices, call us at (214) 295-1008 to schedule a consultation. Our Dallas bad-faith insurance lawyers can advise you of your options under the law.

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