What You Can Do If Insurance Denies Your Claim

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    Bad Faith Insurance Tactics: What You Need to Know

    You may have a bad faith claim when an insurer deliberately undervalues your claim, wrongfully denies coverage, or uses tactics designed to limit their payout.

    State insurance laws require companies to investigate thoroughly, communicate clearly, and pay legitimate claims of policyholders.

    When first-party or third-party insurers violate these duties, you have legal options.

    The insurance policy creates contractual obligations.

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    When insurers fail to act in good faith they can be sued for damages.

    Bad faith lawsuits can recover your original damages plus additional compensation for the insurer's misconduct.

    Call 888-713-6653 for a free case review.


    At-a-Glance: Types of Bad Faith

    • Your insurer denied your claim while failing to provide proper, written justification for the claim denial
    • The insurer denied your claim without reviewing medical records, interviewing witnesses, or examining accident evidence
    • Your approved claim remains unpaid weeks or months later with repeated excuses about processing issues
    • The settlement offer falls significantly below your documented damages without any detailed justification for the gap
    • Your policy language clearly covers the accident but the insurer denied your claim anyway
    • Adjusters threatened to drop your coverage or warned you'll get nothing if you hire an attorney
    • The insurer cited policy exclusions that don't apply to your situation or misrepresented state insurance laws to justify denial
    • Delaying payouts on a valid claim
    • Intentional misrepresentation, misconduct, or patterns of behavior that are done with illicit purposes
    • Sending unnecessary document requests in order to overhwelm a claimant to get them to give up on a claim

     

    When Insurers Undervalue, Deny, or Delay Your Legitimate Claim

    Bad faith requires intentional insurer conduct designed to avoid paying benefits you're owed despite facts, policy terms, or state laws supporting your claim.

    Not every claim denial gives rise to a claim of bad faith.

    A legitimate bad faith claim against the insurance company requires certain deliberate bad acts.

    Settlement offers should match provable damages. Large unexplained gaps between your losses and their offer signal, but not proof they were made in bad faith.

    Undervaluing your claim, is not in and of itself, bad faith on behalf of the insurers. In many scenarios it is part of the negotiating process. However, legitimate denials and offers cite specific policy language and provide detailed justification. Your denial letter should specify which provision applies and why. Bad faith is when the insurance company's actions are in violation of the insurance laws, contradict their own policy documents, or when they fail to fulfill their obligations.

    Our attorneys can help you identify bad faith conduct and hold insurers accountable for wrongful denials.

     

    Experienced injury lawyers available near you to review your case

     


    How Do I Know When to File a Bad Faith Claim Against an Insurance Company?

    You can file a bad faith claim when your insurer violates their legal duty to handle your claim honestly and fairly.


    You have a valid bad faith claim when you see these indicators:


    • Claim denied without legitimate policy justification
    • Investigation skipped critical evidence before denial
    • Settlement offers significantly below documented damages
    • Conflicting information or policy misrepresentation
    • Payment delays exceeding state deadlines
    • Denial letter provides vague, generic reasoning

    The denial letter itself often contains evidence of bad faith when analyzed properly. Document all communications and provide them to your attorney.

    State laws impose deadlines for filing bad faith lawsuits that can expire while you negotiate with the insurer.

    Review your case with an attorney who will assess the insurer's conduct, and determine if you have grounds for a bad faith lawsuit seeking additional compensation.



    How Do I Know When to File a Bad Faith Claim Against an Insurance Company?

    You can file a bad faith claim when your insurer violates their legal duty to handle your claim honestly and fairly. An insurance bad faith attorney can review your denial, assess the insurer's conduct, and determine if you have grounds for a bad faith lawsuit seeking your original damages plus additional compensation.

    Recognizing When Your Insurer Is Acting in Bad Faith

    Denying Claims Without Valid Explanation

    Insurance companies must provide specific reasons for denials tied directly to policy terms or factual disputes.

    Valid denial letters reference specific policy provisions, explain why they apply to your claim, and cite evidence reviewed during investigation.

    Generic rejection letters with vague reasoning violate good faith standards.

    Conducting Inadequate Investigations

    State laws require insurers to investigate claims thoroughly before making coverage decisions, including reviewing medical records, accident reports, witness statements, and vehicle damage.

    Quick denials after complex accidents, refusal to interview witnesses, or decisions made without reviewing medical records signal inadequate investigation.

    Unreasonable delays followed by sudden denials often indicate the insurer skipped proper review.

    Delaying Payment on Approved Claims

    State laws require payment within 30 to 60 days after claim approval depending on jurisdiction.

    Insurers who stall approved payments without legitimate justification violate prompt payment statutes.

    Delay tactics include requesting additional documentation after approval, claiming processing issues, or repeatedly promising payment without follow-through.

    Offering Settlements Below Claim Value

    Insurers must evaluate claims based on actual damages, not arbitrary internal guidelines or profit targets.

    When documented damages total $50,000 but the insurer offers $15,000 without justification, they're acting in bad faith.

    Refusing to revise unreasonably low offers after you provide additional evidence constitutes bad faith conduct.

    Refusing to Pay Valid Covered Claims

    Denying claims clearly covered under policy terms when liability and damages are well-documented is textbook bad faith.

    Your policy creates a contract, and when facts and coverage align but the insurer still denies your claim, they breach that contract.

    Insurers who deny these claims prioritize profits over contractual obligations.

    Making Threatening or Intimidating Statements

    Insurance companies must treat claimants professionally throughout the claims process.

    Examples include threatening to drop your coverage if you pursue your claim, warning you'll get nothing if you hire an attorney, or making hostile statements to pressure you into low settlements. This can include sending burdensome and unnecessary document requests to a claimant to get them to give up on a claim.

    Professional disagreements about claim value are normal, but threats, intimidation, and bullying are not.

    Misrepresenting Policy Terms or Applicable Laws

    Insurers must communicate honestly about coverage and legal obligations.

    Intentionally misinterpreting policy language, claiming exclusions that don't exist, or misrepresenting state laws to deny claims constitutes bad faith.

    State-specific laws govern claim handling timelines, investigation requirements, and payment obligations, and insurers who misrepresent these requirements face penalties beyond your original claim damages.

    First-Party Bad Faith vs. Third-Party Bad Faith

    First-party bad faith involves your own insurance company denying or underpaying claims under your own policy.

    Third-party bad faith occurs when the at-fault driver's insurer refuses to settle your claim fairly despite clear liability.

    Your own insurer owes you direct contractual duties under your policy, while third-party insurers must still evaluate claims reasonably and negotiate in good faith.

    Both types create grounds for bad faith lawsuits seeking damages beyond your original claim value.

    Each state maintains specific statutes governing insurer conduct and defining bad faith.

    Time Limits for Filing Bad Faith Claims

    injury lawsuit statute of limitations clock

    State statutes of limitations for bad faith lawsuits typically range from one to six years from the date of claim denial.

    Miss the deadline and you lose your right to sue regardless of how egregious the insurer's conduct.

    Many claimants spend months negotiating with insurers while their filing deadline expires.

    Don't delay. If you suspect you aren't being treated fairly by the insurer, speak with an attorney immediately to preserve your legal rights and determine if you have a case.

    Talk to an Insurance Bad Faith Attorney About Your Case

    An insurance bad faith attorney can review how your claim was handled by the insurance company and help you determine if the insurer violated their legal duty to handle your claim fairly.

    Insurance bad faith lawsuits seek your original claim damages plus additional compensation for the company's wrongful conduct.

    Our legal team knows how to exposue patterns of conduct by the insurance companies that constitute bad faith and can help you hold them accountable.

    When they deliberately undervalue claims, deny valid coverage, or use delay tactics to avoid payment you may have options.

    Call 888-713-6653 for a free case evaluation with experienced attorneys to find out if you have a case.

     

     

     

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