How Do You Know if Your Insurance Company Is Acting in Bad Faith?
Data compiled by the U.S. Department of Transportation Federal Highway Administration (FHWA) for the latest reporting year shows that in 2020, 3,630 injuries occurred on Mississippi highways. There were 752 fatalities that same year. While that federal data doesn’t highlight how many motorists were injured or killed on other types of roadways, multiple sources suggest that our state’s roadway safety indicators tend to be just a little worse than the national average.
The reason we bring up these statistics is that they’re indicative of the fact that a lot of victims likely find themselves needing to file insurance claims to recover compensation for their losses after these accidents occur. These may include medical bills, lost wages, property damage, and other crash-related costs.
Most individuals expect insurance companies to be honest or trustworthy and to pay what they’re clearly responsible for. While that happens in most cases, a handful of unscrupulous auto insurance companies deny claims for virtually every imaginable reason at every opportunity possible.
Below, we’ll discuss how insurers should handle claims and how you can tell if an insurance company is acting in bad faith. We’ll wrap this piece up by sharing what you can do if you find that to be the case.
How Auto Insurance Companies Should Handle Claims
Mississippi is an at-fault insurance state, meaning you’d typically file an insurance claim with the at-fault party who caused your vehicle’s damage or your injuries unless, for some reason:
- The other driver wasn’t covered by insurance, and you had uninsured motorist coverage
- The motorist who struck you had too little insurance for the damages you sustained, and you had underinsured motorist coverage
- You had some additional coverage like med payments or collision coverage to pay for some of your accident-related costs
Typical Steps in the Auto Insurance Claims Process
Provided the insurance situation is fairly standard, so in other words, the motorist at fault for causing your crash has the minimum mandatory coverage required by Mississippi law, which is $25,000 per person or $50,000 per accident and $25,000 for property damage, the process of filing a claim from your perspective would go as follows:
- Notify the insurer of your filing
- Have your vehicle repaired
- Submit any medical bills, pay stubs, and any proof of accident-related losses to the at-fault motorist’s insurance adjuster
- Negotiate a settlement
- Sign a release of all claims and receive a settlement check
As you can likely tell, the claims process is generally pretty straightforward. However, complications may arise when there’s disputed liability—which is one of the particular areas where the concept of bad faith insurance practices may be introduced.
Which Tactics Rise to the Level of Bad Faith Insurance?
Insurance companies are like any other business in that they aim to increase their profits. As such, they may arbitrarily make decisions that affect either policyholders or claimants who attempt to recover compensation from an at-fault motorist’s insurer for their accident-related damages. Common bad faith insurance tactics insurers use include:
- Harassing claimants
- Not investigating a claim thoroughly
- Purposely underpaying on claims
- Not taking into account certain evidence when making a liability decision
- Failing to provide a reason for a denial
- Not making timely decisions on submitted claims
- Taking too long to remit payment
- Not having sound reasons for denying a claim
- Consistently requesting additional information, despite having enough to render a decision
Not All Delays or Denials Are Examples of Bad Faith Insurance Practices
It’s important to note that the many different situations described above, whether we’re talking about delays, denials, or something else, don’t always fall under the umbrella of bad faith insurance practices. Instead, those approaches may be necessary depending on the circumstances surrounding your case, such as whether you’re continuing to receive medical treatment, for example.
It should be noted that bad faith insurance practices are unique in that they involve an insurer being purposefully deceptive and failing to abide by standard practices in handling claims. For example, take two insurance companies. If a reputable one was to assess the claim and pay it without question because liability is clear enough to do so and another was to readily deny it, the latter may be thought to have engaged in bad faith insurance practices.
Bad actor insurance companies are like any other cutthroat business, only concerned with their bottom line. They are willing to do almost anything necessary to save some money—even if it means engaging in unethical practices. They engage in these tactics because they think they can get by with it and save money, as they’ve perhaps done countless times previously, and it’s been financially lucrative for them to do so.
What Options Do You Have if an Insurance Company Engages in Bad Faith Practices?
Your first recourse when claims aren’t resolved in your favor is generally to appeal the decision. Whether you must do that should be written into your or the other at-fault motorist’s policy documents (depending on who you are pursuing the claim with).
In the event the appeals process does not work out in your favor or seeing it through isn’t necessary, filing a bad faith insurance lawsuit may be your best course of action. Establishing that an insurer engaged in such practices isn’t always easy, and you better bet that an insurance company is going to fight such allegations with all its might. Having an attorney like ours at Pittman Roberts & Welsh, PLLC to help you understand if your insurance company is acting in bad faith and, if so, the steps you need to follow can be helpful in protecting your rights to compensation in the case.
Contact us to schedule a free consultation to discuss your potential case. It’s free to meet with a bad faith insurance lawyer in our Jackson office to discuss your legal matter.
