Well, that isn't always the case. Bad faith, or wrongfully denied insurance claims do happen and can significantly hinder or even eliminate the possibility of recovering your home or property successfully.
]]> A wrongfully denied claim occurs when an insurance company acts in the following manner:Therefore, it's so essential to keep extensive records from the moment you interact with the insurance company and especially once you file a claim. Keep detailed records for each interaction, including the time, date, and description. If your adjuster doesn't show up, is unprofessional, or seems like they are misrepresenting themselves, write it down. Document positive and negative interactions.
Other tips when filing a claim
As you submit, and throughout the life of your claim, keep the following tips in mind:
Insurance companies are supposed to act in good faith, which means to pay fairly when justified and cannot purposely add roadblocks and deny the settlement. While this is a universal agreement, bad faith insurance tactics do occur.
]]> Examples of bad faith tacticsHow to prove a bad faith claim
You will have to prove that the insurance company acted unreasonable and mistreated the claim by citing and proving the specs listed above. One tactic used by insurance companies as defense is to claim the events were only “mistakes and oversights,” which cannot be considered bad faith. Oversight examples can include lost paperwork or missed calls. Another way the insurance company will defend itself, is to say that the claimant acted unreasonable which lead to the cited issues while resolving the case.
You must prove the insurance company was purposely trying to pull a fast one on you. The best advice, is to not fight this alone. If you sense bad faith insurance, contact an attorney who is willing to dig into the details and fight on your behalf.
]]>A prospect in Ohio spoke with a Health Insurance Innovations sales representative in 2016. The sales rep assured her that he would find her the best policy at the lowest price. He offered her a policy for $240 a month. She believed that it was a traditional health plan with coverage guarantees and purchased the policy.
]]> Not until the policyholder found herself with $48,000 in medical bills did she realize that she was sold a limited benefit plan, which paid an extremely low amount toward medical bills. It was shocking and devastating for her—the bills cost more than her annual salary.Another policyholder paid premiums on an insurance policy for two years before finding out that his insurance would not cover his surgery.
A Kansas resident bought a policy that he believed to be full coverage. In early 2018, he was diagnosed with a form of breast cancer. He needed surgery to remove the cancer, but the hospital informed him that his insurance would not cover the procedure, ultimately leaving him with $40,000 in medical bills.
The issue
Both policyholders believed they were being sold Affordable Care Act plans at the time of purchase. Not until much later did they realize that their plans provided only limited coverage, leaving them with thousands of dollars in unpaid medical bills.
Although these limited coverage policies were not meant to cover catastrophic health injuries, the insurance company may be held responsible if the policyholders can prove that the sales representative wrongfully portrayed information.
Health Insurance Innovation denies all allegations, stating that they will be defending all accusations of wrong-doing. With $352 million in sales last year, they claim that the lawsuit has no merit.
If the court finds that Health Insurance Innovations has improperly denied coverage or has failed to pay the full value of the claim, they will subject to reprimand. In addition, Health Insurance Innovations will be required to pay for both plaintiffs’ attorney fees, as mandated by Florida law.
]]>Unfortunately, every contract is different. There might not be a specific rule in your contract about how quickly they must send you a check. However, Florida consumer protection laws state that it must be within a “reasonable” time frame.
]]> What is a “reasonable” time frame?Florida laws provide a framework for insured people to have realistic expectations of their insurers. The following is a guideline for reasonable timeliness:
What else do these guidelines allow?
Some situations allow the insurer to take time extensions before they file your claim. This might be a devastating weather event, a disastrous business event or another situation. However, a company cannot use these excuses forever. If you suspect that the insurance company is stalling or abusing the system to delay or deny you coverage, you may be entitled to legal compensation.
]]>After a couple weeks, you get a letter telling you the claim has been denied, and that you are responsible for the damages. What do you do now?
]]> Confirm your policy is up to dateThe first thing you need to do is double-check your policy. Make sure the last payment was on time, and there hasn’t been a lapse in your coverage. No claim can be contested if you have let your policy lapse, so this is the most important step. Determine if your insurance policy is up-to-date and in good standing.
Compare the denial letter to your policy
The claim denial letter will specifically outline why they denied your claim. Try to match up this denial with your policy. Check to see if the specific condition is clearly described in exceptions, or whether the policy fails to mention it.
If your denial letter isn’t specific, talk to the adjuster. Ask them for a clear reason for the claim denial, and to provide documentation listing the exact reasons for denying your claim. Don’t let them give you a vague reason for denying your claim.
Document all communication and damages
Save all written communication between yourself and the insurance company. This includes requests for specification or any official denials. These are important if you need to take the company to court. Don’t communicate with your insurance agency without written proof.
Thoroughly document the damage to your house. Keep all pictures, and any bid estimates around fixing the damages. Make sure to track the time you spend dealing with contractors, repair companies and the insurance company itself.
Plan your next step
At this point, you have a clearer idea of whether your insurance company had a reason to deny your claim. If you feel your claim is valid, you can contest the denial. The first step is contacting an attorney with experience in insurance law. They can help you move forward with defending your claim.
]]>An insurance adjuster will meet with you, review the damage to your home and provide an estimate of your damages. The hard truth is that they may not prioritize your best interest because they work for the insurance company, not you.
]]> Get the ball rollingWhen making a claim for fire damage, it is important to do it promptly and to pressure your insurer to respond as soon as possible. If you contact your insurance immediately, it may allow you to get things started quickly. Submitting a sworn "proof of loss" is an important part of the initial process. This statement is made under oath and provides the relevant information the insurance company will need for the claim. This is not something you can ignore as Florida law requires policyholders to provide proof of loss upon the insurer's request.
Though some insurers may not request the proof of loss information, they may build it into the terms of your insurance policy. Simply put, if your insurance does not request the information or have it built into your policy, you do not have to provide it.
Information you should provide when submitting your claim
You may want to be aware that the adjuster's estimate could be significantly different than the contractors'. If you disagree with the estimate, there may be specific provisions you're entitled to in your insurance policy.
]]>Unfortunately, some companies will do neither of these, fighting valid claims and dragging their feet when they are required to pay.
]]> This can be a frustrating ordeal, but how do you know when your insurance company has crossed the line and started acting in bad faith?Under Florida law, insurance companies have two duties to all customers:
They have a duty to cover
You pay insurance companies lots of money to protect you if things go wrong, and when they don't follow through it can be devastating. When you have a valid claim, and the company still refuses to cover you, they have acted in bad faith.
There are lots of tricks companies use to invalidate a rightful claim, from challenging valuations to processing a claim exceptionally slowly in hopes you'll give up in frustration.
They have a duty to defend and indemnify
The obligation to protect and indemnify means the insurance company has a responsibility to protect you from lawsuits even partially covered under a liability policy.
The company must also cover claims up to your coverage limit if someone takes you to court and a judgment is rendered against you.
Any doubts about your insurance company should be taken seriously. If they don't fulfill their obligations, consider legal representation.
]]>How an assignment of benefits (AOB) works
]]> An AOB is an option provided to policy holders with the intention of making the claims process easier to manage. Signing an AOB form grants a third party (e.g. repair contractor) the ability to make decisions pertaining to the rights of the policy for the homeowner. An insurance company gains direct communication and decision making through a third party relating to what changes and agreements to make going forward in the process.The danger of AOB abuse
What may have started out as a solution for people has grown into an epidemic of corruption leaving many consumers bound to unresolved problems. Insurance companies are interested in paying out as few policies as possible and a third party is not apt to do what is in the best interests of a consumer. A policy owner who has signed an AOB form to a third party grants the ability to:
Assignment of benefits are most commonly used within homeowners insurance for claims due to water damage. For instance, a homeowner with hurricane water damage to their property who grants AOB to a contractor repair service could find the claim denied by the insurance agency. When this happens, the homeowner suffers from repair work left undone and unsettled costs.
Fighting insurance corruption through legal action
Insurance companies are flooded with claims long after the hurricane has ended. The corruption continues to appear as insurance adjusters employ unlawful tactics to avoid payouts as much as possible. Homeowners often are left wondering when and if they will ever see the money they have been expecting. However, these results may not realistically come without a legal fight.
It is unfortunate that many residents are resorting to legal battles when seeking a fair outcome, especially amidst a natural disaster. A denied insurance claim should not be the final decision. Legal resources are available to confront unlawful acts and seek just compensation for claims.
What do you think should be done to protect policyholders from AOB abuse, so legitimate claims can be paid?
]]>Life insurance is supposed to provide security for widows, but insurance companies usually check to see if they can escape payments somehow. They examine medical records to see if they show differences from what the policyholder reported to the company. Sometimes, however, they make incorrect assumptions or fail to see what really happened.
]]> Common reasons why your claim might be denied include:The insurance company might keep you waiting while they look for an excuse to avoid paying the full amount. In the meantime, your bills could pile up, and you might not know if you need to seek another form of financial support. Delays and denied claims can put you at a disadvantage, especially if you still have children to raise.
It’s easier for an insurance company to evade payment if you don’t fight back. You have the option to disagree when an insurance provider tells you that they won’t pay after your spouse spent years building this benefit for your sake. After all, these companies don’t know the whole story – and they usually don’t want to hear your side.
]]>One of the many frustrating things about dealing with a broken pipe is the aftermath. There are many insurance stipulations surrounding plumbing. Insurance covers most damage from broken pipes, but it truly depends on the circumstances and your insurance policy. Claims are often denied or undervalued for multiple reasons.
]]> Understanding policies and paperworkAs profit-driven businesses, providers can name rules to avoid making full payment. Insurance policies are complicated, but the insurer always has to give you a clear explanation for any denial. Common reasons include timeliness of your claim, exclusion clauses, insufficient documentation and more. Even a single error on your claim can invalidate the request.
It's reasonable that a homeowner would make a mistake in filing or that you might even misunderstand your coverage. Sometimes these simple mistakes can be corrected but, in other instance, the provider won't budge even after errors have been fixed. There are many examples of bad faith insurance, including delayed communication, denied or undervalued claims, deceptive practices and incomplete investigations.
Recovery and moving on
You've paid for your policy and you deserve full value in return. If denied, you have the right to appeal or to pursue legal action. While it's possible to do these yourself, there is little margin of error amid the documentation and bureaucratic filings. By consulting with an insurance attorney who understands the nuances of the industry, you will be able to reduce stress at a time when you need to clean up a mess and look forward.
]]>According to an article from Naples Daily News, it is not the state's hurricanes that are causing the problem. Instead, insurance companies are pointing the blame at fraudulent claims. Meanwhile, many policyholders still report difficulties getting the help they are entitled to for perfectly legitimate property damage claims.
]]> Insurers Blame Assignment Of BenefitsInsurance companies say that they are suffering huge losses, in part due to fraudulent activity associated with "assignment of benefits." This is a practice that allows a contractor to collect money from the insurer directly, provided the claim has been assigned to them by the homeowner. Insurance companies say that claims are more expensive when they are assigned, and are more likely to lead to disputes.
But what of the property owners who do need help and instead have had their property damage claims denied, either because the insurance company has accused them of fraud or for some other reason? The article states that fraud may be committed under the guise of water damage claims related to broken water heaters, damaged pipes and other not-so-natural disasters. But certainly these can be legitimate claims too.
Tips For Policyholders With Property Damage Claims
According to the article, a spokesperson for the Office of Insurance Regulation offers a few tips for policyholders, such as making certain that all repairs are necessary, allowing the insurance company to inspect property damage before making repairs, and getting to know the ins and outs of the insurance policy.
Sometimes these are easier said than done. Insurance policies can be extremely complex, repairs might be needed quickly to prevent further damage and many property owners may not have the technical savvy to know exactly what repairs are necessary.
One step that can be taken to combat allegations of fraud and to overcome disputes with the insurance company is to get an experienced lawyer involved as soon as possible to help you understand exactly what you are entitled to under your policy.
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