When an insurance company tries to avoid a full payout or renege on its contractual obligations, a homeowner might suffer stress and economic distress. It’s important to read the fine print and to fully understand the terms of your insurance policies to avoid legal complications or disputes. If you’ve encountered a problem due to bad-faith insurance, it’s also important to know where to seek support to help resolve the issue.
An insurance agent is breaching a contract if he or she misrepresents the terms of a policy. Your agent must also fully disclose all policy limitations and exclusions to you before you sign a contract. Recognizing the signs of bad-faith insurance is the first step toward protecting your interests and enforcing the terms of an agreement.
Red flag issues that suggest a bad-faith insurance attempt
If your homeowner’s insurance company does any of the things shown in the following list when you file a claim, you might be dealing with a bad-faith insurance scheme:
- Agent is making unfair demands on you to prove a covered loss
- Insurance company has unreasonably denied your claim
- Offer made is less than what your claim is worth
- Failure to issue a payout
- Tactics to delay claim, such as requesting exorbitant number of documents
When acting in bad faith, an insurance company might try to persuade you to settle for less, hoping that you need the money bad enough to accept a payout that is less than the worth of your claim. This, along with failing to issue your full payout in a timely manner or requesting an unreasonable amount of documentation to prove your losses, constitutes unlawful behavior.
What can you do about bad-faith insurance?
If you are dealing with a major roof leak or damage from a fire, theft or vandalism, repairs and expenses may be covered under your homeowner’s insurance policy. Such events are upsetting, and it’s helpful to know that your policy can provide funds to restore the condition of your home. If your insurance agency has denied your claim or is using tactics to stall or avoid payout, you can seek support through the Oklahoma legal system.
There are laws that protect consumers against bad-faith insurance. Every state governs these issues differently, so it’s important to seek clarification of Oklahoma insurance laws before filing a complaint or initiating litigation. It’s also wise to seek experienced guidance and support before heading to court because bad-faith insurance issues are complex and require vast knowledge of state laws and contract terminology.