Know YOUR RIGHTS: Understanding Denied Claims, Bad Faith, and Legal Help
Insurance is like a safety net that helps protect us when things go wrong. But it’s essential to be honest when signing an insurance agreement and provide all the necessary information. If you don’t, it’s called misrepresentation.
Sometimes, insurance companies can make it challenging to receive your payout, even if you’ve done everything correctly. They might try to delay, deny, or pay you less than what you deserve. If you signed the insurance contract based on false information, they can cancel the contract, leaving you without that safety net.
On the other hand, insurance companies may also misrepresent the contract details. They might try to pay as little as possible to increase their profits rather than helping their customers.
To avoid problems, it’s crucial to talk to your insurance provider and clarify any parts of the contract you don’t understand before agreeing to it.
If you ever face difficulties getting the insurance payout you deserve, you should seek help from an experienced bad faith insurance lawyer. They understand the tactics and language used by the insurance industry and can work to get you the compensation you should receive.
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Understanding Misrepresentation in Insurance: Important Concepts Unraveled
To comprehend how misrepresentation works in the insurance industry, there are four key concepts you should be familiar with:
- Denied Claims Based on Policy Terms: Trust forms the basis of any insurance contract. Your policy coverage will only apply if you meet all the terms outlined in the contract. Here are some common violations that can jeopardize your insurance coverage:
- Concealing pre-existing health conditions.
- Providing incorrect or fraudulent information.
- Failing to update nominee information.
- Keeping other existing insurance policies a secret.
- Insurance Company Acting in Bad Faith: Trust goes both ways. If your insurance provider unreasonably delays, underpays, or denies your claim, they are acting in bad faith. Fortunately, you can hire a bad faith insurance lawyer to hold them accountable and obtain what you rightfully deserve. Here are some examples of bad faith insurance practices you may encounter:
- Not providing a valid reason for denying your claim.
- Failing to acknowledge the receipt of your claim officially.
- Refusing to conduct a proper investigation of your claim.
- Neglecting to inform you about significant policy changes that affect your coverage.
- Forcing you to repeatedly go through unnecessary paperwork filing.
- Wrongfully accusing you of misconduct.
- Misrepresentation of Policy Details and Claims: Misrepresenting insurance details can lead to varying degrees of consequences, depending on their significance in evaluating your case. There are three types of misrepresentation:
- Innocent misrepresentation, which involves unintentionally sharing incorrect information with your insurance provider.
- Negligent misrepresentation, which refers to sharing inaccurate information without verifying its accuracy.
- Fraudulent misrepresentation, which means deliberately concealing or falsifying insurance information.
- False Information from an Agent: Insurance agents have a responsibility to fully disclose all policy coverage terms. They possess knowledge about the impact of each policy they sell. Here are some examples of fraudulent activities by insurance agents:
- Stealing premiums and concealing them by setting up a fake customer account using another customer’s premium.
- Stealing premiums before they are credited to an account, and crediting payments into customers’ accounts maintained by the insurer.
- Creating fake policies and incentives.
- Forging policy holders’ signatures.
Knowing these concepts can help you make informed decisions when dealing with insurance matters, ensuring you are protected and treated fairly in case of any unfortunate events.
Common Forms of Insurance Misrepresentation Explained
It’s essential to be aware of the common forms of insurance misrepresentation that can affect you:
- Purchasing Unnecessary Provisions: Some insurance agents may recommend additional policy provisions that you don’t really need. This can lead to higher premiums without providing any real benefit.
- Misrepresentation by an Adjuster: Insurance adjusters, who assess your claim, might try to pressure or manipulate you into making statements that could be used against your claim.
- Insurer’s Goal of Paying as Little as Possible: Insurance companies aim to maximize their profits and minimize payouts. They may use tactics like rushing you into settling for less, tricking you into admitting fault, or repeatedly offering inadequate settlements.
- Denial of Coverage for Damages Covered by the Policy: Unjustified denials can occur due to bad faith practices by insurance companies. They might fail to communicate properly, modify policy provisions, or demand unreasonable documentation, leading to denied coverage.
The Impact of Low Settlement Offers and Complex Jargon
Insurance agents take advantage of your urgency and lack of legal knowledge when you file a claim. They may pressure you into accepting a low settlement offer, claiming it’s the best they can do. Additionally, they might inundate you with confusing legal jargon and cite vague policy terms to penalize you.
Misrepresentation as a Case of Bad Faith
When an insurance company engages in misrepresentation, they are acting in bad faith. This can involve misleading actions by insurance agents during policy purchase or deceitful behavior by adjusters after a claim is filed. In both cases, your rights as a policyholder are violated, and you have the right to seek legal action and recover damages.
Seeking Legal Help for Insurance Company Misconduct
Insurance companies prioritize their own interests and use their legal skills to protect their profits. To have someone fighting for your best interests, you need an experienced California bad faith insurance lawyer. At the Law Offices of Colby Lewis, our team of lawyers has a proven track record of success in handling various insurance cases, including health, disability, life, auto, homeowner’s, and commercial property insurance, as well as business interruption claims.
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