When an accident happens or when a destructive natural calamity comes, one major source of finances for the needed medical treatment or for repair/replacement of damaged property is insurance, a person’s means to protecting himself or herself from financial losses in the event such a catastrophe.
Some individuals even choose to pay higher premiums for higher benefits when needs arise. Often, though, policy holders end up disappointed and feeling cheated as the amount of financial benefit Insurance providers often grant are much smaller than the amount of the policy that they purchased. In many other instances, Insurance firms either deny or disapprove a claim, or maliciously impede the processing of a claim.
These tactics are the means employed by insurance providers in what is called bad faith – the act of deceiving another person by deliberately and maliciously refusing to honor a contractual obligation. Bad faith is a violation of the “implied covenant of good faith and fair dealing,” a law in most US states that is suggested in insurance contracts. Violation of this covenant gives the policyholder the legal right to file a claims lawsuit against the insurance provider due to breach of contract and for tort claim.
On its website, the law firm Smith Kendall PLLC explains the enormous responsibility that insurance companies have towards their policy holders in the event of an injury and/or serious damage to their properties. Sadly, however, due to the goal of these companies to earn and maintain profitability, many resort to means that will enable them to avoid legal responsibility and make payouts.
The violation of the trust placed by policyholders on insurers is enough to warrant any legal action against the latter and, if proven to be guilty of acts of bad faith, then they can end up paying policyholders an amount higher than the face value of the policy. Insurers, though, should consider seeking the help of a highly-competent insurance bad faith lawyer for a firm ground in the legal fight with insurance providers. This is due to the complexity of the law and the insurance policy, which may leave the policy holder more confused than clarified.