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Posted 10/11/2017

How to Recognize a Bad Faith Claim Denial

How to Recognize a Bad Faith Claim Denial

People pay insurance premiums for the peace of mind that comes with knowing that should disaster strike, they’ll be able to file a claim and recover compensation to help them get through the unfortunate event and land on their feet.

Unfortunately, while insurance companies love collecting premiums, they hate paying out on claims. From life insurance policies to disability insurance, it’s startlingly common for claims to be denied. While sometimes these denials are based on misinterpretations or errors, other claims get denied with seemingly no reason given.

When this happens, you could be dealing with a bad faith situation, and it pays to know how to recognize when an insurer is willfully choosing not to live up to its end of the contract, as doing so could entitle you to additional compensation.


Insurance Bad Faith: What to Watch For

Detailed below are some tips on how to recognize when an insurer is denying a valid claim in bad faith:

  • No Reason Given – When an insurance company denies a claim, it needs to provide you with justification for the decision, and that reasoning needs to conform to what’s outlined in your policy.

  • Delayed or Discounted Payout – The insurance needs to provide you with a benefits check in full and in a timely manner.

  • Failure to Acknowledge Your Claim – If you correctly file your claim, the insurance company should acknowledge receipt and keep you informed on the claim’s status. They cannot simply ignore you and your claim.

  • Justification Based on Insurer’s Error – It’s possible that the denial’s justification is based on an error or failing of the insurance company. For example, a “lack of evidence” cited by the denial might be due to the insurer’s failure to investigate promptly or fully.

  • Interference with Retaining a Lawyer – The insurance company cannot prevent you from retaining legal counsel. Hiring an attorney for help with your claim is your choice—not theirs.


Toronto Insurance Lawyers

The Mirian Law Firm knows all the tricks and tactics insurers like to use in order to avoid paying out on claims. Our team includes a number of former insurance adjusters, so we know exactly what to look out for.

If you think that your insurance company is dealing with you in bad faith, schedule a time for a free consultation with one of our experienced insurance lawyers. Just visit us online or call
647-556-5888.

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