Insurance agents have a duty of loyalty and honesty to their clients. It is their job to ensure that their clients receive the amount indicated on their policy when making a claim. Unfortunately, this is not happening and customers are denied of the proceeds that they ought to receive. This is what is called bad faith insurance claims or “insurance fraud.” This happens when an insurance company refused to pay out the amount stipulated in the insurance policy.
The website of Williams Kherkher reveals that insurance bad faith happens because insurance companies want to minimize the payments they will make to the insured. Even if the insured is fully entitled to receive money from the insurance provider based on the policy, the insurer will do everything to save money by not paying everything they owed to the insured.
There are many instances when an insurance company is acting in bad faith. A common example is when the insurance company unreasonably delays the payment of insurance to the insured.
Every insurance policy has a stated or implied “covenant of good faith and fair dealing.” Part of acting in good faith on the part of the insurance company is paying the policy holder promptly. Their failure to do so is a violation of the “implied covenant of good faith and fair dealing.”
Should you push through with an insurance bad faith claim against your insurer, you can be entitled to receive compensation from your insurance company. You may be awarded with compensatory damages so you can return to the same position that you have been in had you been paid promptly and correctly. Likewise, the court may order the insurance company to pay you punitive damages. The amount of damages may vary from one state to another. In some states, there will be a limit on the punitive damages while in others there is no limit.Read More