Sometimes, things don’t go as planned. Whether it’s an unexpected medical emergency, natural disaster, or automobile accident, insurance is meant to provide the financial support you need to recover and move forward.
Unfortunately, some insurers prioritize profits over policyholders, using unethical tactics to deny or delay valid claims. These bad faith practices can leave you feeling betrayed and financially vulnerable at your worst point.
However, there are steps you can take to prevent this from happening.
At the law firm of Manning Herington, we specialize in fighting for policyholders’ rights and holding insurers accountable. If you’re looking for a Denver bad faith insurance attorney, we are here to help.
This guide explores common bad faith tactics and provides actionable steps to protect your rights in Colorado.
What Is Bad Faith Insurance?
Purchasing insurance comes with the expectation that your provider will handle your claims fairly and support you in times of need. In fact, according to the National Association of Insurance Commissioners (NAIC), insurers are legally required to act in good faith, ensuring prompt and fair handling of claims to protect policyholders.
When companies violate this obligation and prioritize their financial interests over yours, it’s known as a bad faith insurance practice.
This might include denying valid claims, offering lowball settlements, or unnecessarily dragging out the process. These behaviors undermine the principle of fair dealing that is fundamental to every insurance contract.
In Colorado, insurers must meet their obligations under strict legal standards. If you believe your insurance company refuses to act fairly, you may be entitled to file a bad faith lawsuit to hold them accountable.
Common Examples of Bad Faith Insurance
Delaying Claim Processing
Some insurance companies intentionally drag out the claim process, hoping policyholders will grow frustrated and give up. This can involve failing to respond to emails or phone calls, repeatedly requesting additional paperwork, or simply refusing to provide updates.
Such delays create unnecessary stress—especially when you’re counting on the payout to cover urgent expenses. They’re also prohibited by the Unfair Claims Settlement Practices Act (UCSPA).
Denying Valid Claims Without Explanation
After an accident, the process of securing coverage for essential treatments (like spinal injury or traumatic brain injury) and returning to normalcy can be both stressful and time-consuming.
However, it can quickly become unbearable if your insurance company denies your claim without providing a valid reason. They may cite vague policy terms or fail to offer any evidence to support their decision.
This lack of transparency leaves third-party claimants and policyholders alike feeling helpless and unsure of how to proceed.
Lowball Settlement Offers
Offering settlements far below the value of your claim is another tactic bad faith insurers use. These offers ignore the full scope of damages and fail to consider long-term costs. Policyholders unfamiliar with their insurance coverage may feel pressured to accept these lowball amounts, believing they have no other option.
Failure to Investigate Promptly
A prompt and thorough investigation is critical to resolving insurance claims, but bad faith insurers may avoid this step altogether. Instead, they might delay assigning an adjuster or fail to review evidence you provide.
These unnecessary delays prevent claims from moving forward, leaving you without the compensation you need.
Misrepresenting Policy Terms
An insurance company acting in bad faith may deliberately misrepresent your policy’s terms to avoid paying out claims. For example, they might claim certain damages are excluded or suggest your policy doesn’t cover specific situations.
Such misrepresentation not only violates fair dealing but also makes it harder for policyholders to seek compensation under bad faith laws. This behavior can make it seem like you misunderstood your policy when, really, the fault lies with the insurer.
How Insurance Companies Are Legally Obligated to Act
Insurance companies are required to act in good faith when handling claims, adhering to state regulations and their insurance contracts. In Denver, this includes:
- Promptly acknowledging claims
- Conducting thorough and unbiased investigations
- Paying valid claims without unnecessary delays
Keep these in mind as a rule of thumb. If an insurer fails to meet these standards, they may be acting in bad faith.
How to Protect Yourself From Bad Faith Insurance
Understand Your Policy
Carefully reading your insurance policy is your first line of defense against bad faith practices. Determine what your policy covers, what it excludes, and the limits of your insurance policy coverage.
Additionally, keep an updated copy of your policy on hand so you’re prepared to counter any false claims made by your insurer.
Document Everything
Always maintain a paper trail when dealing with your insurance company. Document emails, letters, and phone calls to make sure you have evidence of your interactions. This record-keeping can prove invaluable if the insurer acts in bad faith or fails to fulfill their obligations.
File a Claim Promptly
To avoid unnecessary disputes, report your claim as soon as possible after an incident. Late filings can result in claim denials due to untimely reporting. Providing accurate and detailed information upfront will help avoid unnecessary complications later.
Be Persistent
Don’t hesitate to follow up with your insurer regularly. Reaching out makes sure they prioritize your claim and don’t let it linger. Staying firm and organized sends a message that you expect timely processing.
Seek Legal Help With a Bad Faith Insurance Attorney
Sometimes, the best way to protect yourself is to seek legal help. A bad faith insurance attorney will help you gather evidence, understand complex legal processes, and fight for your rights.
Manning Herington specializes in bad faith insurance claims, offering personalized assistance to Denver residents. Get in touch for help with your claim.
Steps to Take If You Suspect Bad Faith Insurance
(1) Request Written Explanations
If your claim is denied or delayed, ask your insurer to provide a written explanation for their decision. This forces them to document their reasoning and can reveal inconsistencies or unfair practices.
Request specific reasons for their decision rather than accepting vague or generic statements. This step not only holds the insurer accountable but also strengthens your case if you decide to challenge their actions.
(2) Gather Evidence
Keep detailed records of everything related to your claim, from photos of damages to conversations with your insurer. Include any written correspondence, such as emails and letters, as well as invoices or bills for repairs. The more evidence you collect, the better equipped you’ll be to prove bad faith behavior.
(3) File a Complaint
If your insurer continues to act in bad faith, consider filing a formal complaint with the Colorado Division of Insurance. This regulatory agency reviews complaints and investigates unfair practices by insurance companies. Filing a complaint can also pressure the insurer to resolve your claim more fairly.
Taking Control of Your Insurance Rights
Bad faith insurance practices can add significant stress and financial strain when you’re already facing tough circumstances, but you don’t have to face these challenges unprepared.
When you take the time to fully understand your policy and seek professional assistance, you can take control of the claims process and safeguard your rights.
Staying proactive and informed empowers you to recognize and challenge unfair practices, holding insurance companies accountable when it comes to fulfilling their obligations.
How Manning Herington Can Help
Manning Herington is well-versed in bad faith insurance claims. Our team in Denver understands Colorado’s laws and fights for clients’ rights. We offer personalized attention and legal guidance to help you secure fair compensation.
If you’re looking for a Denver bad faith insurance attorney, Manning Herington will stand by your side. Contact us today to set up a free consultation to discuss your case and learn how they can help you secure the compensation you deserve.
