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What to do if your insurance coverage fails you

On Behalf of | Apr 18, 2024 | Civil Litigation, Insurance Law |

Insurance policies safeguard individuals, households and businesses, much like a protective shield. Policyholders often need various insurance types, such as health, auto, home, rental or one related to their business, such as medical malpractice insurance or business interruption insurance. These policies are crucial in reducing risks and maintaining a family’s health and financial well-being during unexpected events. But what happens when an insurer fails to honor a policy the client has paid for over the months or years?

Here is a step-by-step process for the policyholder to get what they paid for.

Step 1: Decipher your policy’s language

At times, policyholders may prioritize cost over policy specifics, potentially overlooking coverage limitations that could affect future claims. It’s essential to scrutinize the actual policy documents to determine the scope of coverage and possible compensation. This step is vital, especially if you are considering legal action.

Step 2: When legal action becomes the path forward

Unfortunately, confirming that a policy should cover a claim isn’t always enough to compel an insurer to settle it. Even with solid evidence that the policy is applicable, insurance companies may still resist and withhold coverage. In such instances, pursuing bad faith insurance litigation might be the only recourse to address what amounts to the insurer’s contract breach. If the plaintiff is successful in court, they could secure claim approval, court-awarded damages and payment of legal expenses.

Step 3: Watch for bad faith insurance tactics

Bad faith by an insurer can manifest in various ways:

  • Intentionally misrepresenting policy terms or coverage details to the policyholder.
  • Failing to conduct a timely and thorough investigation of a claim.
  • Refusing to pay a claim without a reasonable basis.
  • Using unreasonable delay tactics to avoid settling a claim.
  • Threatening the policyholder or using aggressive tactics to discourage them from pursuing a claim.

Timely and informed responses to bad faith insurance can significantly impact a policyholder or family’s ability to overcome unexpected obstacles.

Step 4: Take a stand

Recognizing potential insurer liability and acting swiftly against bad faith practices can be a turning point that enables policyholders to move forward. Armed with knowledge and the right legal strategy, policyholders can take companies to court to secure the support and services they paid for and deserve.