Insurance is supposed to protect policyholders in times of need. You pay your premiums faithfully, expecting that your insurer will be there to help if something goes wrong. But it can be quite frustrating when your claim gets denied. Claim denials happen but they become illegal at some point. Below are illegal tactics insurance providers use when delaying claims:
Delaying their Response to Your Claim
Insurers might take weeks or months to respond to a claim. They may ask for unnecessary documentation or request repeated forms. Sometimes, insurers say your paperwork got lost and ask for a new set of it. Some delays are legit but insurers know that dragging things out might force claimants to give up. This would be an advantage for the insurer.
It becomes an issue when the delay is only meant to wear you down or avoid payment. This can be a violation of the duty of good faith. Insurance companies have a legal obligation to treat claims fairly and promptly.
Misinterpreting Policy Language
Insurance policies contain complex and confusing language that an average person may not understand. Some companies interpret these terms in ways that favor them. For instance, a homeowner’s policy might cover water damage but not flooding. So, they may not cover a burst pipe, asserting it counts as a flood.
Interpreting unclear language can become a bad faith tactic when it is unreasonable or contradicts how the average person would understand the policy. Claimants can seek court intervention if their insurer takes their case this way.
Blaming the Policyholder
Insurance companies may blame the person making the claim for their situation. They might say you did not disclose something important when buying the policy or claim you were negligent in preventing the damage.
Insurers can investigate and protect themselves against fraud but this tactic is often overused. Many of them bend the truth or look for reasons not to pay. They make exaggerated accusations without proper evidence. This gives claimants a legal ground to bring this issue to authorities.
Downplaying the Value of Your Claim
You expect a payout when you submit an insurance claim. However, the insurer may offer a lower amount than what you need to cover your damages. They may depend on lowball estimates or outdated market values when making an offer. Negotiating with claimants is part of the process but consistently offering low settlements with no justification can violate consumer protection laws. It is also another form of acting in bad faith.
Ignoring Medical Opinions
A lot of insurance companies deny claims despite strong medical evidence. This is common in health and disability insurance. For example, your doctor says a surgery or treatment is medically necessary but the insurer disagrees and refuses to pay. They might depend on their own in-house medical reviewers who never see you or cherry-pick details to justify a denial. Overriding professional medical opinions without solid reasoning can be grounds for legal action. This is especially the case if it causes harm due to delayed treatment.
