Insurers must handle claims fairly and promptly. When they unreasonably deny, delay or underpay a valid claim, they may be liable for bad faith.
Examples
- Denying a claim without a reasonable basis.
- Failing to investigate or respond within a reasonable time.
- Misrepresenting the policy.
- Lowball offers that ignore clear evidence.
- Demanding unnecessary paperwork to delay payment.
Build your case
- Keep a log of every call, email and letter.
- Get denial reasons in writing.
- Gather evidence supporting your claim.
- Send a written request for reconsideration.
- Note deadlines in your policy and state law.
Where to turn
- File a complaint with your state insurance department.
- Invoke appraisal or arbitration clauses if applicable.
- Consult an insurance attorney, many of whom work on contingency.
- Sue for breach of contract and, in some states, for bad faith with extra damages.
Time limits
Policies and state law set deadlines to sue, sometimes as short as one year. Act promptly.
Frequently asked questions
Is every denial bad faith?
No. Insurers can deny claims for valid reasons.
What damages are available?
They can include the unpaid benefit, interest and in some states additional damages.