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How to Identify Bad Faith Insurance Practices
On January 17, 2008 the Florida Office of Insurance Regulation (OIR) suspended Allstate’s right to issue new policies to any customers in the state until it complies with a subpoena for a confidential report from a New York consulting firm, McKinsey & Co. The report helped Allstate redesign its claims-handling process in the 1990s. According to regulators, Allstate redesigned the process to maximize revenue by reducing payments on claims without considering the merit of the claim, then taking policy-holders who ask for more money to court. In other places, this strategy has been described as “Deny, Delay, Defend.”
Although Allstate is at the center of this battle, a number of insurance companies received reports from the same firm, and many of them redesigned their claims process at the same time. As a result, insurance companies are posting record profits while many policyholders are left without money to replace homes destroyed in hurricanes or pay bills for injuries suffered in auto accidents.
Insurance companies rightfully deny some claims, sometimes they are just seeking to cut costs and increase profits. If your claim has been denied, but you don’t know why; if your agent told you would be covered, but now you are not; if your claim has been unreasonably delayed, you may be a victim of these bad-faith insurance practices.
Florida law stipulates that you should receive good faith and fair dealing from your insurance company, but the companies do not always provide it. You might be experiencing bad faith insurance practices if any of the following are true:
- They offer you a quick settlement below your medical expenses
- Your insurance company seems to be looking for an excuse not to pay for brain injuries or other soft-tissue injuries clearly spelled out as covered in your policy.
- They tell you your policy means something other than it seems to say.
- They are extremely slow to respond for a routine claim like an auto accident.
- They are vague about what provisions do or do not apply in your case
If your insurance company is acting in bad faith, can a lawyer help? Yes! But your lawyer will be most effective if you take certain steps to make sure you are complying with the law’s guidelines.
Good faith and fair dealing standards
First, understand the expectations placed by Florida law on your insurance company. The law requires that your insurance company:
- Cooperate with you to properly adjust the claim
- Properly investigate your claim
- Pay or investigate your claim in a reasonable time period
- Provide you written notice that it is investigating your claim within 30 days after you complete your proof-of-loss statement
- Explain in writing all claim denials with reference to specific facts, applicable laws, and portions of the policy used to make the decision
- Begin with the assumption that the claim should be paid rather than simply looking for reasons not to pay it
- Request additional information when necessary to resolve your claim and explain why the information is relevant
- Conduct fair practices with you, meaning that it must:
- Try to get all necessary information it needs in as few statements and inspections as possible
- Make appointments for statement and inspections at reasonable times
- Seek to clarify the terms of your policy applicable to your claim
- Keep you informed at all times of your claim’s progress
Also remember that you must help your insurance company resolve your claim to avoid charges that you are acting in bad faith. Your insurance company will try to pin misconduct on you to avoid responsibility for your claim. To keep them from doing so, you must:
- Promptly submit your claim
- Truthfully and thoroughly answer all reasonable questions from the insurance company
- Make statements concerning your losses under oath, if asked
- Be available at reasonable times to give additional statements or be present at inspection of claim sites
- Keep appointments with your insurance company
If youve done your part, but it doesn’t seem to be getting you anywhere, it’s time to consult a bad faith insurance lawyer from Colling Gilbert Wright & Carter. We will provide you with a free claim evaluation and represent you on a contingency basis, meaning you will pay no attorney fees unless you recover on your claim.