WHAT IS BAD FAITH?
Often we adjusters are threatened with "Bad Faith". In order to avoid and prevent bad faith exposure, we must train ourselves on what exactly it is. In keeping with our "to the point" knowledge tools approach, coveragejet has put together the following "quick learn"on bad faith. Example: When an insured/claimant files an insurance claim with an insurance company, by law, in any state, that company owes you a duty to act in good faith. Simply put, this means that the insurance company must not look for ways to escape its obligation to investigate the claim or to pay you. Doing so would constitute bad faith. Bad faith claims and lawsuits may stem from one or more of a number of actions or inactions by the insurance company from denial of coverage to failure to negotiate a settlement. Here are some of the typical reasons insurance companies get sued for bad faith:
Often we adjusters are threatened with "Bad Faith". In order to avoid and prevent bad faith exposure, we must train ourselves on what exactly it is. In keeping with our "to the point" knowledge tools approach, coveragejet has put together the following "quick learn"on bad faith. Example: When an insured/claimant files an insurance claim with an insurance company, by law, in any state, that company owes you a duty to act in good faith. Simply put, this means that the insurance company must not look for ways to escape its obligation to investigate the claim or to pay you. Doing so would constitute bad faith. Bad faith claims and lawsuits may stem from one or more of a number of actions or inactions by the insurance company from denial of coverage to failure to negotiate a settlement. Here are some of the typical reasons insurance companies get sued for bad faith:
Unwarranted denial of coverage
Failure to communicate pertinent information to the claimant
Failure to conduct a reasonable investigation of the claim
Refusal to pay the claim without investigating
Failure to deny or pay the claim within a reasonable period of time
Failure to confirm or deny coverage within a reasonable period of time
Failure to attempt to come to a fair and reasonable settlement when liability is clear
Offering substantially less money to settle than the true value of the claim
Failure to promptly provide a reasonable explanation for denial of a claim
Failure to enter into any negotiations for settlement of the claim
Failure to respond to a time-limit demand
Failure to disclose policy limits
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