Insurance is meant to provide peace of mind, but what happens when your insurer does not play fair? Insurance bad faith occurs when insurers fail to honor their obligations to policyholders. To protect yourself, you must understand your rights to safeguard your interests before and after filing a claim.
Before filing a claim
To protect yourself from insurance bad faith, you may want to consider these steps before filing a claim:
- Know your policy by heart
You may want to take the time to read and understand your insurance policy thoroughly. Know your policy’s coverage limits, exclusions and claim procedures. If something seems unclear, it may help to ask your insurance agent for clarification.
- Keep detailed records
It may help to maintain a file with all your insurance-related documents. This may include your policy, correspondence with your insurer, and any relevant receipts or photos. These records can be valuable in case a dispute is necessary for a claim decision later.
- Be honest and accurate
It helps to always provide accurate information when applying for insurance or renewing your policy. Misrepresentation can give your insurer grounds to deny claims or cancel your policy.
After filing a claim
After filing a claim, you may want to follow the steps below to help prevent insurance bad faith:
- Document everything
It may help to keep a detailed log of all interactions with your insurance company. You may want to note down dates, times, the names of representatives you spoke with and summaries of your conversations. This documentation can be crucial evidence if you need to prove bad faith.
- Respond promptly to requests
Insurance companies often work within specific periods. It may help if you respond promptly to any requests for information or documentation. This may prevent them from giving an excuse to delay or deny your claim.
- Know your rights
Familiarizing yourself with your state’s insurance laws and regulations may be beneficial. Many states have specific time limits for insurers to respond to claims and provide written explanations for denials.
- Consider seeking professional help
You may want to consult an attorney if you suspect your insurance company is acting in bad faith. They can help you understand your options and fight for your rights.
Insurance companies typically have teams of lawyers and adjusters working to protect their interests. By staying informed and maintaining thorough records in your dealings with your insurer, you can level the playing field and protect yourself from potential bad faith practices.
