What Are Common Ways an Insurance Company Can Exploit You?

Having insurance in our day and age is very necessary, especially for families that have multiple cars, medical payments, and properties. There are multiple types of insurance you can get, and deciding which insurance companies to work with can be a hassle. Once you’re with one, as a customer, you want to be able to rely on your insurance company. However, insurance bad faith claims are pretty common, and it’s critical to realize when your insurance company is trying to abuse your rights.

What Are an Insurance Company’s Duties?

First, it’s important to know what duties an insurance company must fulfill to their policyholder. Their duties are to investigate, to reimburse, to defend against a claim, and to settle reasonably. If your insurance company refuses to do any of these duties, they can be accused of bad faith. Failing to investigate means that the company failed to conduct a proper and thorough investigation of a claim and provide data and assistance. If your insurance doesn’t reimburse you for a settlement agreement or judgment, then they could be failing to fulfill their duty of indemnification. Their duty to defend would mean they should defend you against a claim. In most situations, your insurer should cover any defense costs, regardless of their insurance coverage limits. Lastly, your insurance company cannot refuse to settle a lawsuit if they think something would reduce their liability during a trial. If a settlement is going to be advantageous to you, the insured, your insurance should recognize that.

What’s My Call to Action?

If you know that your insurer has acted in bad faith, and has purposefully tried to exploit you, they can definitely be sued. There are two kinds of bad faith claims against your insurer: a breach of contract or tort. You can claim a breach of contract if you can prove that your insurer broke its agreement of insurance coverage and defense. In certain situations, you can claim that your insurer’s bad faith was a kind of tort, which is when one party causes harm to the other party through their actions.

The lawyers at Wells, Call, Clark, Bennett and Clawson can help you file a claim against insurance bad faith and exploitation. Contact our Northern California law firm for more information on how you can get the settlement you deserve.

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