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What is a “Bad Faith” Claim?

What is a “Bad Faith” Claim?

Car insurance is designed to protect drivers from financial loss in the event of an accident. If you are involved in an accident, car insurance can help pay for the cost of repairs to your vehicle and any medical expenses you may incur. In some cases, car insurance can also provide coverage for the cost of a rental car while your vehicle is being repaired.

The companies that offer insurance, however, are profit-seeking businesses, and one of the ways they make money is by paying out as little as possible.

Insurance Bad Faith

Insurance companies owe a duty of good faith and fair dealing to their policyholders, meaning they must deal with claims in a timely, efficient, and honest manner. Unfortunately, some insurance companies engage in bad faith practices in order to try to minimize the amount of money that they have to pay out on claims. There are many methods that an insurance carrier may use to avoid paying a policyholder:

  • Refusing to Payment in Timely Fashion.
  • Failing to Thoroughly Investigate Claims.
  • Outright Denying or Undervaluing Claim.

Refusing Payment in Timely Fashion

There are several reasons why an insurance company might intentionally delay paying a claim. In some cases, the insurer may be trying to force the policyholder to accept a lower settlement amount. In other cases, the insurer may be hoping that the policyholder will simply give up and drop the claim.

Failing to Thoroughly Investigate Claim

To avoid paying on a claim, it is not uncommon for insurance companies to intentionally fail to investigate the claim thoroughly. This may involve delaying the investigation or outright refusing to look into certain aspects of the claim. The insurance company may not gather all relevant information or may not speak to key witnesses.

Denying or Undervaluing Claim

One common way that insurance companies intentionally deny or undervalue claims is by using the "fine print" in the policy to their advantage. For example, they may claim that the policy doesn't cover certain types of damage or that the policyholder didn't meet the requirements for filing a claim. They may also try to lowball the claim amount or offer a settlement far less than what the policyholder is owed. In some cases, insurance companies may even go so far as to fraudulently deny claims altogether. They may also claim that any claimed injuries are exaggerated to seem more severe.

Insurance Bad Faith Attorneys in St. Louis, Missouri

Insurance companies are obliged to act in good faith and deal fairly with policyholders. When they fail to do so, they may be liable for damages. At Kolker & Labovitz, our attorneys have extensive experience handling insurance bad faith claims. If you have been the victim of insurance bad faith, we can help. We will work tirelessly to recover the compensation you deserve.

If you have been a victim of insurance bad faith, contact us today at (314) 684-8285 or fill out our form online.

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