Protecting Your Rights After Insurance Bad Faith Denials
At the Law Office of Bruce C. Betzer, we understand how devastating it can be to face a denied insurance claim, especially when you’ve paid your premiums and trusted your insurance company to act in good faith.
Unfortunately, insurers sometimes wrongfully deny claims, delay payments, or fail to honor the terms of their policies. These actions, known as bad faith practices, leave policyholders in vulnerable positions, often when they need financial relief the most.
If you’ve experienced an unfair denial or delay, it’s important to know that you have legal options in Metairie, Louisiana. We work tirelessly to hold insurance companies accountable and protect our clients’ rights.
Let’s take a closer look at what constitutes insurance bad faith, how to recognize it, and the steps you can take to fight back.
What Is Insurance Bad Faith?
Insurance bad faith occurs when an insurer fails to fulfill its contractual obligations to a policyholder, acting dishonestly or unfairly in handling a claim.
Common Bad Faith Practices
Some of the most common examples of bad faith include:
Unreasonable claim denials: Refusing to pay a valid claim without justification.
Delaying payments: Failing to process a claim or issue payment within a reasonable timeframe.
Lowball settlements: Offering significantly less compensation than the claim is worth.
Misrepresentation of policy terms: Providing false or misleading information about coverage.
Failure to investigate: Ignoring or inadequately investigating a claim.
These actions violate the duty of good faith and fair dealing that insurers owe to their policyholders.
Recognizing Bad Faith Insurance Practices
Knowing how to identify bad faith practices is critical to protecting your rights.
Warning Signs of Bad Faith
Lack of communication: The insurer ignores your calls, emails, or written requests for updates.
Inadequate explanations: You’re not given a clear reason for a denial or delay.
Misrepresentation: The insurer claims your policy doesn’t cover certain damages despite clear policy language.
Unreasonable demands: Repeated requests for unnecessary documentation that delay claim resolution.
Delays without cause: Processing your claim takes far longer than expected, with no valid explanation.
If you suspect your insurer is acting in bad faith, it’s essential to take action immediately.
Steps to Protect Your Rights After Bad Faith Denials
Dealing with bad faith insurance practices can feel overwhelming, but there are steps you can take to protect your rights and hold the insurer accountable.
1. Document Everything
Thorough documentation is critical for building a case against an insurance company. Keep records of:
All communications: Emails, letters, and phone call logs with the insurer.
Policy documents: Your insurance policy, including coverage details and terms.
Claim documentation: Receipts, invoices, photos, or other evidence supporting your claim.
Having detailed records strengthens your position and provides evidence of bad faith behavior.
2. Request a Written Explanation
Ask the insurer for a written explanation of their denial or delay. Under many state laws, insurers are required to provide specific reasons for their decisions. A lack of clear explanation may further demonstrate bad faith.
3. Escalate Within the Insurance Company
Before pursuing legal action, it’s worth escalating your concerns within the insurance company. This might involve speaking to a supervisor, contacting the claims department manager, or filing a formal complaint with the company’s customer service department.
4. Consult a Legal Professional
Insurance companies often use their resources and legal firms to avoid paying claims. Working with an experienced attorney levels the playing field and helps you pursue compensation.
Legal Remedies for Bad Faith Insurance Practices
Policyholders have several legal options when dealing with bad faith denials.
Filing a Breach of Contract Claim
When an insurer fails to honor the terms of its policy, you may file a breach of contract lawsuit. This type of claim seeks to recover the benefits owed under the policy.
Pursuing a Bad Faith Claim
In addition to breach of contract, policyholders can file a bad faith lawsuit. These claims seek compensation for:
Emotional distress: The stress and anxiety caused by the insurer’s actions.
Punitive damages: Additional compensation designed to punish the insurer for egregious misconduct.
Financial losses: Damages resulting from delays, underpayments, or denied claims.
A successful bad faith claim holds insurers accountable and discourages similar behavior in the future.
Examples of Bad Faith in Different Types of Insurance Claims
Bad faith can occur in nearly every type of insurance policy. Recognizing how it manifests in different contexts is essential for protecting your rights.
Auto Insurance Claims
Common bad faith practices in auto insurance include:
Denying coverage for repairs or medical expenses after an accident.
Lowballing settlements for totaled vehicles.
Delaying the resolution of uninsured or underinsured motorist claims.
Homeowners’ Insurance Claims
Insurers may act in bad faith by:
Denying coverage for fire, water, or storm damage despite policy provisions.
Misrepresenting policy exclusions to avoid paying claims.
Delaying payments for repairs, leaving homeowners in financial distress.
Health Insurance Claims
Examples of bad faith in health insurance include:
Refusing to cover necessary medical treatments or procedures.
Failing to process claims within a reasonable timeframe.
Misclassifying treatments as “non-essential” to deny coverage.
Life Insurance Claims
In life insurance cases, bad faith practices may involve:
Denying claims based on minor inaccuracies in the policyholder’s application.
Failing to pay beneficiaries in a timely manner.
Misrepresenting the terms of the policy to reduce payouts.
Each type of claim requires a tailored approach to address bad faith effectively.
How We Fight Insurance Bad Faith Denials
At the Law Office of Bruce C. Betzer, we work diligently to protect policyholders from bad faith practices.
Comprehensive Case Evaluation
We begin by thoroughly reviewing your policy, claim, and the insurer’s actions to identify potential violations. This includes examining the denial or delay’s justification and comparing it to policy terms and state laws.
Building a Strong Case
Our firm gathers evidence to support your claim, including:
Communications with the insurer.
Documentation of damages or losses.
Professional opinions, if necessary, to establish the validity of your claim.
Negotiation and Litigation
We negotiate aggressively with insurers to secure fair compensation for our clients. If a settlement cannot be reached, we’re fully prepared to take your case to court.
Preventing Future Bad Faith Practices
While you can’t control how an insurer acts, there are steps you can take to protect yourself from bad faith practices in the future.
Review Your Policy Carefully
Understanding your coverage limits, exclusions, and responsibilities as a policyholder helps you avoid surprises during the claims process.
Act Quickly After an Incident
Promptly filing your claim and providing all necessary documentation minimizes the risk of delays or denials.
Keep Detailed Records
Maintaining organized records of all communications, invoices, and evidence assures you’re prepared to dispute unfair actions.
Know Your Rights
Familiarize yourself with state laws regarding insurance claims and bad faith practices. Understanding these laws can help you identify when an insurer is acting unlawfully and what steps to take in response.
Additional Support for Policyholders
Dealing with bad faith insurance denials is stressful, but having the right support can make all the difference.
Community Resources
In addition to legal representation, some states offer insurance complaint departments or ombudsman programs that can assist policyholders in resolving disputes. Filing a complaint with these organizations may prompt an investigation into the insurer’s practices.
Staying Informed
Staying up to date on your policy’s terms and any changes assures you’re prepared to hold insurers accountable if disputes arise.
Reach Out to the Law Office of Bruce C. Betzer
If you believe your insurer has acted in bad faith, don’t face the fight alone. At the Law Office of Bruce C. Betzer, we proudly serve clients in Metairie, Chalmette, New Orleans, Jefferson Parish, and St. Tammany Parish.
Contact us today to learn how we can assist you with your insurance bad faith case in Louisiana.