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Sedona Insurance Law Blog

Know the fundamental duties your insurance provider owes you

When you purchase an insurance policy, you do so to protect your finances in the event of a catastrophe. Unfortunately, insurance companies do not always act in the best interests of their clients. An insurance provider will sometimes offer less compensation than necessary, or deny a claim entirely.

If you have filed a claim with your insurance company only to have it denied, you may feel powerless. Claimants in this situation often believe that their insurance provider has the final say in the matter, but this is not true. You may not realize it, but you are entitled to have your insurance company provide several duties to you. If a company should violate any of these duties, it may constitute bad faith—and necessitate a lawsuit.

Arizona dad gets $6.5 mill in bad-faith disability insurance suit

If you suffer an injury that impacts your cognitive abilities and psychological wellbeing, it can knock you down in a big way. It can completely debilitate you, leaving you unable to work or function as normal. In such scenarios, you depend on your disability insurance to have your back.

Such was the case for the 40-something father of two when a traumatic brain injury caused him to suffer from a serious form of depression resulting in anxiety, suicidal thoughts and multiple rounds of hospitalization. He filed a claim with his disability insurance company, which proceeded to give out monthly payments to their client.

How insurers deny long-term care insurance claims

As more Baby Boomers continue to retire, long-term care insurance providers have to pay out claims for a large pool of customers. As a result, they may try to mitigate costs by not paying out all that is due.

There are several ways they may attempt this. They could deny coverage by claiming a long-term care facility is not covered in the plan, which may be true – plans written in the 1990s were written differently today. Regulation of the long-term care industry is more stringent now than it used to be, back when many of the current policy holders looking for payouts were purchasing plans. 

What happens when my auto insurance won’t pay?

Question: I was in a car accident. A car in front of my overshot a driveway and then backed up to try and get into it. I tried to get out of their way, but they ended up hitting me and then lying and said I hit them. I had a witness, but the insurance companies said it doesn’t matter—they say she changed her story. What can I do?

Answer: Your policy with your auto insurance company is a legal contract. As such, there are things you are required to do—for example pay your premiums on time, etc., and in return the company is required to honor their part of the contract—which is to pay your claims.

My insurance company won’t pay my fire claim—now what?

Question: My house recently suffered fire damage. My daughter’s bedroom was essentially destroyed, and the rest of the house has smoke damage. Our insurance company has rebuilt her bedroom, but is balking at taking care of the smoke damage in adjacent parts of the house. Do I have any recourse?

Answer: The policy you have with an insurance company is a legally binding contract. Therefore, you are required to fulfill certain obligations—being truthful on your application, pay your premiums on time, etc. In turn, your carrier is required to cover your losses when you file a claim.

Storm damage? Make sure you get all the compensation you are owed

In the last few months, the number of storms and natural disasters is extraordinary. It seems like there is no end to the damage—from Puerto Rico to Texas and Florida to Mexico, many folks have endured extreme devastation to their homes and other property. As a result, insurance companies have been flooded with new claims.

What happens, though, when your insurance company decides not to make good on your claim? If you’ve paid your premiums and kept your policy up to date, can your insurance company just decide not to pay?

What happens when an insurance company won’t pay?

Folks in Florida and Texas are dealing with the aftermath of property damage due to Hurricanes Harvey and Irma. Many people did not have flood insurance, and many did not have policies that will cover the total extent of the damage.

For those who do did purchase adequate coverage, will their insurance companies actually pay the claims, or will they delay or deny payments? Insurance companies are in the business of making money. One way to ensure they keep their profits is to deny claims, citing a variety of reasons.

Legal help necessary when bad faith tactics are used

The insurance system is an incredibly important one in our society. There are unexpected events that can happen that leave most people financially or physically unable to cope with the fallout. This is where insurance kicks in. The companies that provide insurance must step up as their policies dictate to cover their clients. This means that after the death of a family member with life insurance; or damage and injuries in the wake of a car accident; or devastation to a home due to a natural disaster; it is on the insurance companies to cover their clients.

However, this whole system of trust in insurance companies falls apart when the companies partake in bad faith practices, or they deny claims under dubious pretenses. Without that trust in place, the system collapses. Bad faith insurance is the root cause of this, and when it occurs, the victimized people need to hold their insurer accountable.

How to safeguard your bad faith insurance claim

When we purchase insurance, we do so with the expectation that if, and when, we need it, our insurance carriers will pay our claim. After all, we have made our payments—sometimes over many years—diligently and faithfully every month since we bought the policy.

We did so in good faith—and with every expectation that our losses would be covered in the event we ever needed them. So what happens when our insurance companies act in bad faith and deny our claim?

How will an insurer stall during legal proceedings?

We know that some insurance companies will go to extraordinary lengths to avoid paying otherwise legitimate claims, so it should not be surprising when they are less than ardent about answering discovery requests.

The process of discovery is very important when litigating insurance bad faith cases. Essentially, an aggrieved plaintiff is allowed to request information concerning the insurer’s guidelines with regard to responding to claims, its agreements with contractors investigating loss claims, information concerning loss ratios, as well as any other relevant information. 

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