How Do I Know When to File a Bad Faith Claim Against an Insurance Company?
You may have a claim for bad faith when an insurance company deliberately undervalues your claim, wrongfully denies your claim, or engages in a pattern of behavior intended to limit their payout on your claim. Mere claim denial or a lengthy investigation is not, in itself, sufficient to show bad faith. Bad faith requires some affirmative, deliberate conduct by your insurer that is designed to avoid paying the benefits you are owed and which flies in the face of facts, policy language, or public policy.
Types of Bad Faith
Insurance bad faith can manifest in many ways. Insurance companies engage in bad faith behavior whenever they engage in conduct designed to avoid or limit a payout and which serves no legitimate purpose. Bad faith conduct includes, among other behavior:
- Misrepresenting policy language or facts in order to deny or limit a claim
- Unjustifiably delaying investigation of a claim or rendering a decision about a claim
- Delaying payments on a valid claim
- Failing to provide proper, written justification for a claim denial
- Failing to conduct a full investigation before denying a claim
- Threatening litigation in order to cause a claimant to accept a low settlement
- Misrepresenting medical science in order to justify claim denial
- Constantly sending burdensome and unnecessary document requests to a claimant to get them to give up on a claim
While denying a claim, taking a long time to investigate, and stating a willingness to take a claim to court are not in and of themselves wrongful conduct, they may rise to bad faith when they are done with illicit purposes. Bad faith claims require that extra element of insidiousness: denying a claim for the wrong reasons or for no reason at all, delaying an investigation without justification, engaging in bullying or delay tactics designed to get a claimant to drop their case or accept a lowball settlement, deliberately misreading their own policy or ignoring facts in your medical record, or otherwise engaging in behavior that serves no legitimate purpose other than to skirt their obligations.
Do I Have a Legitimate Claim of Bad Faith?
Not every claim denial gives rise to a claim of bad faith. Not even every slow investigation or settlement offer that is lower than expected necessarily means your insurance provider is engaging in bad faith. Even if you have a legitimate reason to appeal a claim denial, your insurance company’s conduct might not be in bad faith.
For a claim to rise to the level of bad faith, the insurer needs to have committed certain deliberate bad acts. Whether they committed those bad acts depends on key documents specific to your claims. First and foremost, the language in your insurance policy will dictate heavily whether a claim denial was legitimate or made in bad faith. Insurance policies are long, bloated documents deliberately intended to be complex to give insurers leeway in deciding upon claims and to keep policyholders in the dark. A bad faith insurance attorney can help you review your policy for the relevant language, including policy exclusions and limitations.
Official statements from your insurer, along with any communications between you and your insurer, are also important in determining whether you have a bad faith claim. Did your insurer provide a thorough written explanation for a claim denial? Is that explanation consistent with the language in the policy and with the facts of your medical condition and treatment? Is it consistent with modern medical science? Has your insurer been responding to your reasonable requests for updates on their investigation of your claim? Have they been ignoring you, taking an exorbitant amount of time to make a decision, or constantly requesting you send them additional documents and evidence that is burdensome for you to obtain and not reasonably necessary for them to render a judgment? Any of these might give rise to a bad faith claim.
Your medical records and the statements made by your physicians might be the strongest evidence in your favor. If your health insurance claim is denied, look to the specifics in your medical records. Look to the statements of your treating physician, including their diagnoses and recommendations. If your physician recommends a course of treatment as necessary, and your insurer denies coverage for that treatment, they may be deliberately ignoring both the facts of your medical condition and the clear recommendations of your physician. Deliberately ignoring recommendations from treating physicians, other medical experts (for example, recommending certain treatments for certain conditions), the specifics of your injury, illness, or condition, or any other relevant facts can give rise to a claim of bad faith.
Don’t Let Insurance Companies Get Away With Bad Faith. Call Gianelli & Morris for Help.
If you are a California insurance policyholder or beneficiary and you have faced a wrongful claim denial or bad faith conduct by an insurance company, call the insurance law attorneys Gianelli & Morris for a free consultation regarding your case.