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November 13, 2019
4 min read time

How to Identify Bad Faith Claims Conduct

When an accident or natural disaster results in damage to your home or property, you expect your insurance company to be there for you to provide help and compensation. While most insurance providers negotiate in good faith to settle insurance claims by property owners, some companies ignore the fact that homeowners purchased a paid-for promise in the form of an insurance contract. This is called bad faith conduct on an insurance claim.

Filing Insurance Claims with Your Homeowners Insurance

Your insurance contract requires that the insurance company provide protection against property damage and negotiate in good faith to settle insurance claims that are covered by the terms of the policy.

Your insurance policy may not cover all types of claims. Denying a claim that is not covered by the insurance contract is not an example of bad faith homeowners insurance claims. An adjuster disagreeing with you about how much your damage claim is worth is also not an example of bad faith.

However, if the adjuster or your insurance provider fails to give you a reasonable, satisfactory explanation for failing to pay your property insurance claim, you could be the victim of bad faith tactics. In many cases, writing to the insurance provider alleging that you believe it is acting in bad faith will get prompt attention from a supervisor.

Most insurance companies treat allegations of bad faith homeowners insurance claims seriously. If a homeowner is successful in proving that the insurance company acted in bad faith, the company may be liable to pay a variety of damages in addition to paying the initial insurance claim. Therefore, simply using the words “bad faith” might encourage the insurance company to begin acting in good faith to settle your property insurance claim. If not, you may want to consult with a Florida insurance claims lawyer to discuss your legal rights and remedies for bad faith homeowners insurance claims.

How to Recognize Bad Faith Insurance Claim Practices

Recognizing bad faith practices can be difficult for individuals who are not familiar with the legal elements required to prove a bad faith claim against an insurance provider.

However, some of the signs that your insurance provider may be engaging in bad faith settlement practices include:

  • Failing to provide a reasonable reason for denying, delaying or discounting an insurance claim.
  • Failing to acknowledge receipt of and reply to a claim.
  • Denying an insurance claim without conducting a prompt, thorough investigation of the property owner’s claims.
  • Failing to deny or affirm coverage of claims within a reasonable time after receipt of a claim.
  • Pressuring a homeowner or property owner to accept a settlement that is unfair or unjust.
  • Cancelling or changing the terms of an insurance policy without prior notification to the policyholder, without consent of the policyholder or in violation of the terms of the existing insurance contract.
  • Attempting to settle a claim or issue a check to settle a claim without a full accounting of the damages and explanation of the payment.
  • Making unreasonable demands of the homeowner to provide support for the claim. Examples include requiring the homeowner to submit unnecessary or overly burdensome documentation not required by the insurance contract or requiring the homeowner to obtain multiple estimates for repairs when not required by the insurance policy.
  • Unwarranted deviations from the standard operating procedures outlined in the insurer’s claims processing manual.
  • Concealing facts or information relevant to the property insurance claim.
  • Attempting to settle a homeowner’s insurance claim for much less than reliable estimates provide for the damage total.
  • Unlawfully delaying payment of a claim to run out the statute of limitations for the claim.
  • Refusing to negotiate a settlement of an initial offer by the company.
  • Using investigators, contractors or appraisers who are biased in favor of the insurance company in their work on the claim.
  • Advising the homeowner not to obtain legal counsel or threatening to deny the claim if the owner contacts a Florida insurance claims attorney.
  • Cancelling an insurance policy because of a claim that was not the fault of the insured.
  • Willfully and intentionally misrepresenting the language of the insurance policy.

The above list is not an exhaustive list of the ways that some insurance companies try to avoid paying a valid insurance claim filed by a homeowner or property owner. The best way to protect your legal rights and your interests is to seek information and advice from an experienced attorney who has your best interests at heart.

What Should I Do If I Suspect My Insurance Provider is Guilty of Bad Faith Homeowners Insurance Claims?

The attorneys at Murray + Murray, a Florida insurance law firm, have over 150 years of experience building and fighting cases like these. If you are a Florida homeowner who suspects you are the victim of a bad faith homeowners insurance claim, call a Murray + Murray attorney today at 1-855-269-4317 for a free consultation. We’re here to help.