Insurance Bad Faith: Warning Signs and How to Act
Insurance companies, like other businesses, exist to make money and keep the money they make. When you pay for an insurance company’s services, you are supposed to be able to trust them to take care of you should anything unfortunate occur. When they hold their end of the bargain, the system works well. They make money, and you have the peace of mind that they will cover you when you need it most.
Without the trust that insurance companies will hold up their end of the bargain, the system breaks down. This is why they spend millions of dollars each year on advertising campaigns to reassure you that they are “good neighbors,” and “you’re in good hands.” They know your trust is essential to their ability to remain successful and profitable. So long as you pay your premiums and they remain true to their word, everyone wins. Unfortunately, they do not always remain honest.
When insurance companies try to shirk their responsibility to their clients, this is called “Bad Faith.” These are some of the warning signs of an insurance company trying to act in bad faith:
- “You don’t need a lawyer.” Anyone attempting to discourage you from speaking with an attorney is working against your best interests, plain and simple.
- “A good person does not hire a lawyer.” Threatening or insulting you for being sure you’re not taken advantage of is how a bully acts, and it’s a massive warning sign of bad faith.
- “We need you to give us a statement.” You should be cautious what you say to your or an at-fault driver’s insurance company, as they may try to use an “I’m fine” said moments after an automotive crash months or years down the line.
- “Here is a check for the full amount of your property damage.” Insurance companies are, typically, obligated for more than the value of property damage. If your car is damaged and has to be repaired, has the insurance company paid for your loss of use of the car? Have they paid for you to rent a car while yours is being repaired? Are they paying for the loss in your car’s value? Probably not to all of these, and if you are owed these and not provided them, it is bad faith.
- “We are offering you all that your claim is worth.” This is one of the nastiest tricks in the book, and insurance companies will regularly use conservative estimates, outdated information, and irrelevant data in order to boost their profits by giving you considerably less than the real value of your claim.
Most attorneys (including us!) will be happy to give you a free consultation, and let you know whether they think your insurance company is acting in your best interests or not. Threatening or insulting you for being sure you’re not taken advantage of is how a bully acts, and it’s a massive warning sign of bad faith. Always be wary when dealing with insurance companies! If you feel that an insurance company may not have your best interests at heart when dealing with a claim, follow that suspicion and speak with an attorney immediately.