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What Is Bad Faith When Dealing With Insurance Claims?

A representation of insurance
Whether you've had an accident, suffered a property loss, or been the victim of a crime, dealing with the insurance company is often one of the most complex and frustrating parts of your ordeal. And if you're denied promised benefits, it becomes an even bigger nightmare. 

What should you know about being denied coverage benefits you've paid for? Here is a short guide to bad faith when it comes to insurance claims. 

Good Faith vs. Bad Faith

First of all, what is bad faith and good faith? Because contracts involve two parties who both expect future services or payment, they are signed in good faith - the expectation that everyone intends to fulfill their roles. When one party does not intend to fulfill his or her part, they are acting, instead, in bad faith. 

One legal dictionary defines bad faith as the "intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others." It's not an error or an oversight - instead, it is intentionally breaching a contract between you and another party.

Bad Faith Insurance Claims

How does bad faith affect insured people? Clearly, bad faith claims generally end up in court in contract disputes. And while you may not think of them as such, insurance policies are contracts between you, the insured, and the company providing coverage. You or your employer pays your premium with the expectation that the insurance provider will provide promised benefits if they're needed. 

What types of situations would be considered your insurance provider acting in bad faith? Some examples include:
  • Denying claims without valid reason
  • Cancelling coverage without valid reason
  • Delaying payments unnecessarily
  • Denying treatments or medications without explanation
  • Interrupting medical care
  • Not responding or communicating
  • Requesting a lot of additional documents or evidence
How might this appear in a real-life situation? After an accident, for instance, your insurance company may approve repairs for your vehicle, but it doesn't get around to actually issuing a check for several months - despite your efforts to resolve the issue or get a clear explanation for the delay.

Or the insurance provider may (without reasonable reason) delay investigating the incident and determining what damage occurred.

The challenge for injured individuals and victims is that insurance companies are very good at explaining these types of actions as normal and necessary. Insurers also generally know the law and everyone's rights and responsibilities better than most covered workers. 

Legal Defense Against Bad Faith

Do you think that you're suffering from a bad faith rejection or delay of your benefits? Don't continue to go it alone. Insurance companies are motivated to save money by using bad faith tactics. They also have legal experts on their side whose job it is to save that money for the insurance provider and make it seem legitimate.

In turn, you need legal assistance to untangle bad faith actions and resolve your claim by making all parties abide by their duties. If you don't already have an attorney in your corner, begin working with one as soon as you notice any kind of delay or seemingly unnecessary requests. Pursuing medical treatment, replacing lost wages, and protecting your job are often time-sensitive needs, so don't wait. 

At the Law Office of Meier, Wickhem, Lyons & Schulz, S.C, we are ready to represent you in bad faith insurance claims. We've helped Wisconsin workers and families get what they are due for more than 30 years. We can help you too. Call today for a consultation.