25 Bad Faith Insurance Tactics by Adjuster After Car Crash
Here's a comprehensive list of 25 tactics by insurance companies that can be considered bad faith practices, along with detailed explanations:
Denying a Claim Without Giving a Reason: Insurance companies are required to provide a valid reason when they deny a claim. Denying a claim without any explanation is a clear sign of bad faith.
Failing to Conduct a Prompt and Complete Investigation: Insurers are obligated to investigate claims thoroughly and promptly. Delaying investigations or conducting them in a cursory manner can unjustly deny or delay rightful claims.
Offering Less Money Than a Claim is Worth: Lowballing claimants with offers significantly lower than the claim's value, hoping they will accept the reduced amount out of financial desperation or frustration, is a common bad faith tactic.
Delaying or Denying Decisions on Claims or Requests for Approval for Medical Treatment: Prolonging the decision-making process on claims or required medical treatments can exacerbate policyholders' distress and financial burden.
Claiming Property Damage is Due to "Normal Wear and Tear": Insurers may deny claims for property damage by attributing it to wear and tear rather than the incident, avoiding responsibility for valid claims.
Claiming Damage is Caused by Inadequate Maintenance: Similar to wear and tear, insurers may blame the policyholder for not maintaining their property properly, thereby denying claims that should be covered.
Misrepresenting the Policy Terms: Providing misleading or incorrect information about policy terms and coverage is a deliberate attempt to confuse policyholders and deny legitimate claims.
Undervaluing Claims Below the Deductible: Insurers might undervalue claims to an amount just below the policyholder's deductible, effectively making the claim worthless and denying coverage.
Causing Unnecessary Delays in Processing Claims: Deliberate stalling tactics, such as constantly asking for more documentation or repeatedly transferring the case between adjusters, can wear down claimants and delay payouts.
Not Communicating with the Insured: Ignoring calls, emails, and other forms of communication from policyholders prevents them from knowing the status of their claim and can lead to unnecessary delays and confusion.
Unreasonable Settlement Offers: Offering settlements that are far below the actual cost of damages or medical expenses forces policyholders to either accept inadequate compensation or endure a lengthy legal battle.
Denying a Claim Without Proper Investigation: An insurance company must investigate a claim thoroughly before making a decision. Denying a claim without a proper investigation is a blatant act of bad faith.
Ignoring or Dismissing Valid Evidence: Disregarding evidence that supports the policyholder's claim, such as medical reports or repair estimates, demonstrates an insurer's bad faith effort to avoid paying a valid claim.
Refusing to Pay for Necessary Medical Treatments: When an insurer refuses to cover medically necessary treatments prescribed by healthcare providers, it puts policyholders' health and well-being at risk.
Failing to Acknowledge Receipt of Claim Documents: Not acknowledging receipt of claim documents can lead to delays and uncertainty for policyholders who rely on timely communication from their insurer.
Requesting Excessive Documentation: Demanding an unreasonable amount of documentation, often repeatedly or for irrelevant details, can frustrate and impede the claims process.
Changing Claim Adjusters Frequently: Frequently switching adjusters can disrupt the continuity of the claims process, leading to delays and increasing the likelihood of errors.
Ignoring Policyholder's Calls and Emails: Not responding to policyholders' attempts to communicate regarding their claim adds unnecessary stress and anxiety during an already difficult time.
Using Ambiguous Language in Policy Documents: Drafting policies with vague or confusing language makes it difficult for policyholders to understand their coverage and assert their rights.
Refusing to Settle Claims Within Policy Limits: When liability is clear, insurers are expected to settle within policy limits to protect policyholders from excess judgments. Refusing to do so can be a tactic to minimize payout obligations.
Failing to Inform the Insured of Their Rights: Insurers are obligated to inform policyholders of their rights under the policy and relevant laws. Failing to do so can disadvantage policyholders and violate their rights.
Misleading the Insured About the Status of the Claim: Providing false or misleading information about the claim's status prevents policyholders from understanding where their claim stands and what steps need to be taken.
Refusing to Pay for Alternative Treatments: Denying coverage for alternative or unconventional treatments that are recommended by medical professionals can impede policyholders' access to necessary care.
Failing to Provide a Clear Explanation for Claim Denials: When a claim is denied, the insurer must provide a clear, specific explanation. Failing to do so leaves policyholders in the dark about how to rectify the situation.
Engaging in Retaliatory Actions Against Policyholders Who File Complaints: Punishing policyholders for filing complaints or pursuing their claims through legal means is an unethical and illegal practice designed to intimidate and suppress rightful claims.