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Winning A Bad Faith Insurance Claim: Can It Be Done?

 

Many policyholders never question a negative decision on their insurance coverage. They believe that the insurance company knows its policies best, and that they must be in the wrong if they don’t understand a clause. Or they may think that they are right, but don’t stand a chance in a legal insurance dispute. What should you do if you suspect unfair insurance practices in the way your claim is handled?
 
Consider these two bad faith insurance scenarios:
 
  • In the first case, a consumer’s claim is denied coverage due to policy terminology. But the consumer understands the language to mean that coverage does exist, while the insurer’s understanding is otherwise. The individual believes himself to be in the wrong and doesn’t attempt to appeal the decision with the company, or with the court.
  • In the second case, the parent of a child who died in a fatal car wreck made an insurance claim for loss of life. The insurance company approved the claim and offered $10,000 on a policy with a $300,000 limit. The parent and personal injury lawyers sued for underpayment, and a jury agreed, finding the offer unreasonable according to policy terms and, therefore, in bad faith. It awarded nearly $4 million in total damages and costs.
 
Can wronged individuals win against insurance companies? Yes, it can be done.
 
Bad Faith Insurance Practices Are Crimes
 
In addition to prosecuting insurers who act in bad faith for the damage they have caused you, there are more reasons to file complaints and lawsuits. As one judge put it, unfair dealing “is endemic to the industry.” With so many lives and dollars at stake, widespread instability in insurance coverage is a severe threat to the health and well-being of American citizens. Repairing a system that is so complex and so entrenched can only be done in increments, and taking each incident to task is the way to do it.
 
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