Types of Bad Faith Insurance

Posted by on Aug 7, 2015 in Business | 0 comments

If your home or property has been damaged but is insured, you’re probably very thankful and relieved to know that your insurance company will help you and give you the financial compensation that you need to make your repairs. Such damage and the following repairs will be stressful all on its own, but if your insurance company refuses to pay the full amount they own under your plan or refuses to pay at all, it can make the situation unnecessarily difficult. There are four main ways that an insurance company can act in bad faith: delaying a claim, improper investigations, refusing to provide full coverage, and improper valuation of property.

When an insurance company delays a claim, it wastes your time. It takes unnecessarily long for you to receive the compensation you deserve, and often you will be forced to constantly contact the company over a long period before they pay part or all of the coverage. For some, this is too much to have to deal with and they never receive compensation – which is exactly what the insurance company wants.

To ensure that people are not abusing their insurance, companies often require an investigation before compensation is paid. This is not to hurt you or cause you inconvenience, but rather to protect the insurance company. However, some companies abuse this practice and use it as a means to deny your claims and avoid giving you the compensation you deserve.

Sometimes your claim is valid and your insurance company owes you a large sum for compensation, but the company refuses to pay all or part of it for one reason or another. Sometimes they simply do not give you a reason for the reduced coverage, other times they will try to make you believe that certain portions are not covered when they actually are.

The amount you are compensated in the event of damage will depend on the original value of the property. Some insurance companies will try to use this fact as a way to reduce the amount of compensation they owe you. They could try to set the value of your property at a much lower dollar value than it is actually worth, so they will then owe you less than they actually should in the event of damage.

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