When you pay for insurance coverage, you expect the policy to cover your damages in case of an unanticipated loss. In some cases, insurance companies will help you get back on your feet and walk you through the process. Unfortunately, this is not always the case. Insurance companies want to make money and can do that by refusing to cover valid claims.
At Gerash Steiner Blanton, P.C., our Denver bad faith insurance attorneys are committed to helping policyholders assert their rights and recover losses in bad faith insurance claims.
What Is Bad Faith Insurance?
A bad faith insurance claim occurs when an insurance company or its representatives breach their duty of good faith and fair dealing concerning a specific client or claim. Insurance companies owe their customers a duty to act in good faith.
Acting in good faith means a person has an honest belief or purpose, is honestly performing their duties, and observes fair dealing standards. To act in good faith, an insurance company must thoroughly investigate all claims and honor its contractual obligations outlined in the customers’ policies.
Insurance bad faith claims typically arise when an insurance company fails to honor its obligations when a customer files a claim. An insurer may violate Colorado law if they unreasonably does any of the following:
- Denies a valid claim,
- Delays investigating or processing a claim, or
- Refuses to defend or indemnify the policyholder against third-party claims.
The key for the plaintiff is proving that the insurance party acted unreasonably. Reasonableness requires the insurer to review the following:
- Policy and coverage limits;
- Causes of the losses or damages;
- Documentation and evidence to support the policyholder’s claim;
- Whether the policyholder complied with the terms and conditions; and
- Whether any deductibles apply.
If you think your insurance company denied or delayed your claim in bad faith, contact a Denver bad faith insurance lawyer to discuss your case.
How Can an Insurance Company Act in Bad Faith?
The customer selects their insurance policy and chooses the type and amount of coverage they want. Although this part of the process is typically straightforward, the complexity of insurance documents makes it difficult to understand what the policy covers. This can make it easier for insurers to act in bad faith without customers realizing it.
Insurance companies can act in bad faith by:
- Paying only a portion of a settlement;
- Providing inaccurate information about policy terms;
- Undervaluing claims;
- Failing to investigate a claim;
- Refusing to offer a reasonable payment;
- Ignoring a claim;
- Delaying claims unnecessarily; and
- Denying legitimate claims covered under the customer’s policy.
If you prove that the insurance provider acted in bad faith, you can recover the amount you are rightfully owed and the costs you incurred from their bad faith.
What Are the Policyholder’s Contractual Obligations?
Like the insurance company, the policyholder must comply with certain duties when they file an insurance claim. These obligations are typically included in your insurance policy’s “conditions” portion. The insurance company can legally deny your claim if you do not fulfill your responsibilities. The policyholder’s duties often include:
- Disclosing material information;
- Reporting loss or damage to proper authorities;
- Providing notice to the insurer promptly;
- Creating an inventory of property damaged or stolen;
- Avoiding dishonesty or concealment; and
- Providing proof of loss to the insurer.
For example, consider that your homeowner’s insurance policy requires two smoke detectors in each room of your house. You do not install the required smoke detectors. Later, your home sustains significant fire damage. In your insurance claim, you neglected to mention that you did not install the smoke detectors as required. The insurance company may deny your claim because you concealed the fact that you did not install the smoke detectors.
Is Insurance Bad Faith the Same as Insurance Fraud?
While people use the terms “insurance fraud” and “insurance bad faith” interchangeably, they refer to two kinds of misconduct. As stated above, bad faith in insurance occurs when companies wrongfully deny or fail to investigate their customers’ claims. Insurance fraud is the deliberate deception by or of an insurance company or its agents for financial gain. Unlike insurance bad faith, customers and insurance providers can commit insurance fraud.
Contact a Denver Bad Faith Insurance Attorney at Gerash Steiner Blanton, P.C., Today
Your insurance company never hesitates to collect your money but may use predatory tactics to delay or deny your coverage. With an experienced Denver bad faith insurance attorney in your corner, you can assert your rights and seek the compensation you deserve.
Our team at Gerash Steiner Blanton, P.C. has decades of combined legal experience advocating for individuals being taken advantage of by insurance companies. Additionally, our firm boasts the following accolades:
- Selection for lists of Best Lawyers in America® and Colorado Super Lawyers®,
- A Colorado physician as a lead personal injury attorney,
- Providing clients with our personal cell phone numbers, and
- A 5.0 out of 5.0 AV® Rating™ for the highest ethical standards and legal skill.
Contact our office today so an attorney can start reviewing your case.