Hurricanes are destructive natural disasters that can cause extensive damage to homes and properties. Policyholders who have purchased insurance to protect themselves and their assets demand that their insurance firms fulfill their contractual obligations and pay their legitimate claims. Some insurance firms may act in bad faith, refusing or underestimating valid claims, which increases the difficulties experienced by the victims.
By consulting hurricane damage lawyers, victims can overcome the bad faith practices of insurance companies.
This article shows seven examples where insurance companies acted in bad faith on a hurricane claim.
1. Denying claims without due cause
Generally, insurance companies refuse a hurricane damage claim by giving an unjustifiable reason. It is one of the most awful bad-faith insurance tactics. This means that the insurance firm has no proper reason to decline the claim, such as lapse of policy, lack of coverage, or fraud.
This tactic makes the policyholder agree to the lowball offer or give up the insurance claim. This kind of bad faith practice is unethical and illegal. Policyholders who experience this must consult an attorney who can fight for their legal rights.
2. Misrepresenting contract terms and policy language
The insurance company may give a false statement of contract terms and policy language to the policyholder in order to ignore paying a claim.
For instance, the insurance firm may claim that the policy does not cover specific types of damage, like hail, flood, or wind, when in fact it does. On the other hand, the insurance company may use vague language in the policy, avoiding the valid expectations of the policyholder.
In this case, the policyholders need to be cautious when reviewing their policies. It is important to get legal advice when they suspect that their insurance firm is misrepresenting or misinterpreting the contract terms and policy language.
3. Failing to disclose policy limitations and exclusions
When buying insurance, policyholders must be informed of the policy limitations and exclusions, like
- Co-payments
- Deductibles
- Waiting periods
- Caps on benefits
Some insurance firms won’t disclose these crucial details to policyholders before they purchase a policy or when they file an insurance claim. This may often disappoint the policyholders when they find out that their insurance coverage doesn’t cover everything they expected.
4. Making unfair demands on the policyholder
Insurance firms often make unfair demands on the policyholder in order to prove covered damages and losses. For instance, the insurance firm may need the policyholder to submit irrelevant or excessive documentation.
The insurance firm may also request that the policyholder face multiple examinations, appraisals, or inspections by different experts or adjusters. This type of bad faith tactic is used to give up or delay the claim process.
5. Lagging investigation process or payment of an insurance claim
The insurance company may delay the investigation process or payment of an insurance claim. This is one of the worst bad-faith practices followed by insurance companies. Insurance companies have the responsibility to acknowledge the rules, investigate, and process the insurance claims within the deadline.
A few insurance firms may intentionally prolong the insurance claim process by postponing, stalling, or avoiding conversations with the policyholder or their representatives. This may cause heavy financial burden and emotional trauma to the policyholder.
6. Offering lowball compensation
Insurance providers underestimate the expenses of repairs and total damages when investigating hurricane damage insurance claims. This means that their offers do not match the actual extent of the loss or the market value of the property. Policyholders in dire financial circumstances will agree to these lowball offers.
Policyholders should never accept any offers without getting legal consultation from an attorney or an independent appraiser who can evaluate the actual value of their insurance claims.
7. Checking for evidence to deny a claim
Few insurance firms may act in bad faith by checking for evidence to deny a claim. They also try to avoid evidence that supports the policyholder’s claim.
They may select information from records, reports, or statements that favor their position and ignore information that contradicts it. They may also use biased or unreliable sources to prove their decisions.
Wrapping Up
To summarize, policyholders who have sustained hurricane damage need to be aware of these seven bad faith practices by insurance firms. It is necessary to take measures to protect their legal rights and interests. They must document their losses clearly, review their insurance policies carefully, speak clearly with their insurance firms, and also get legal assistance when they face any disputes or problems.
By following this, they can improve their chances of getting reasonable compensation for their hurricane damage claims.
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