Friday, March 8, 2013

Examples of Bad Faith Insurance Practices


Per the research I have done here are examples of how an insurance company can act in bad faith:

·         An insurer may be acting in bad faith if the insurer delays, discounts or denies payment without a reasonable basis for its delay, discounting or denial.
·         Failure of insurer to acknowledge and reply promptly upon notification of a covered claim.
·         Failure of insurer to acknowledge and reply promptly upon notification of a covered claim.
·         Failure of insurer to affirm or deny coverage of claims within a reasonable time upon receipt of claim and/or proofs of loss.
·         Failure to offer or attempt to effectuate prompt, fair and reasonable evaluation of damages and equitable settlements of claims to insured within a reasonable time where liability is reasonably clear.
·         Insurer attempts to settle a claim for less than the amount to which a reasonable person would have believed was entitled or attempts to substantially diminish a claim requiring an insured to initiate litigation.
·         Attempting to settle claims on the basis of an application and/or policy which is altered without notice, knowledge or consent of the Insured.
·         Making payment(s) for claims without accompanying statement indicating the coverage for which payment(s) are being made.
·         Insurer failure to make known any arbitration award appeals policy in an attempt to settle a claim for less than the arbitration amount awarded.
·         Failure of insurer to promptly settle claims, where liability and coverage is reasonably clear under one portion of the insurance policy in order to influence settlements of coverage for another portion(s) of the policy.
·         Requesting over burdensome documentation demands not required by the policy.
·         Using illegal and fraudulent investigative methods and procedures.
·         Using harassing, intrusive or demeaning investigative methods and procedures which victimize the insured.
·         Failure of an insurer to settle a claim directly, when and where settlement is required, and instead requiring the insured to pursue a claim against another party first before offering settlement.
·         Failure of Insurer to make full and satisfactory payment of a first party claim prior to requiring settlement or exhausting the limits of a third-party insurer (i.e. in uninsured motorist cases).
·         Unjustified contention and/or "lowballing" regarding the value of a loss.
·         Intentionally withhold, misinterpret or misconstrue claims information and/or failure to not inform insured of provisions and covered benefits under the policy pertinent to a claim.
·         Attempts to use indiscriminate measures, reference and/or procedures that diminish or reduce the top line amount or value representing full payment of the claim.
·         Intentional or irresponsible non-disclosure and withholding of information, misinterpretation of file documents and/or policy provisions that would be in favor of the claimant.
·         Wrongful threats not to pay claims.
·         Utilization and/or development of deceptive insurer schemes or use of outside company services set up or conducted to carry out the same false pretense schemes (i.e. "Independent Medical Examiner Paper Reviews") for the purpose to be able to wrongfully deny or reduce payment of claims.
·         Treatment of insured represented by attorneys as insurer adversaries.
·         Treatment of insured and claimants as adversaries.
·         Significant increase in amount of premium as a result of making a claim where insured was not at fault and in conflict with industry standards.
·         Cancellation of a policy as a result of making a claim or result of an accident where insured was not at fault and in conflict with industry standards.
·         Using inaccurate or wrongful information of a factual or legal nature to diminish, deny or delay payment of a claim.
·         Not being forthcoming with facts regarding coverage to deny, delay or reduce the amount of the claim.
·         Using extreme undue persecution, wrongful and victimizing tactics and actions, meant to crush, threaten, thwart, intimidate, oppress, in order to scare away and get the claimant not to make or pursue a claim.
·         Biased investigation of that which is supposed to be neutral and unbiased.
·         Utilization of internal one-sided or outside companies biased schemes, such as in so-called "IME" bias (independent medical examiner bias), which are supposed to be objective and neutral, in order to wrongfully enable, facilitate and support insurer's position to fraudulently deny, reduce or discontinue payments of claims.
·         Attempting to prevent the court or an insured's attorney with due exception from securing a copy of an insurer's claims manual.
·         Attempting to shift blame and responsibility of investigation to insured and away from the insurer.
·         Intentionally misinterpreting or misconstruing the law to the disadvantage of the insured and benefit of the insurer.
·         Unreasonable misinterpretation of policy language.