Types of First-Party Insurance Bad Faith Actions

Senior couple consulting with lawyerWith the increased knowledge of the benefits of insurance, its uptake has increased. It is common knowledge that in the case of the occurrence of any unforeseen events, which affect what you have insured, the insurer should settle your claim provided you have paid the required premiums.

In most instances, however, this does not happen. This constitutes a breach of the insurance element of good faith. A bad faith attorney based in Los Angeles such as those from Haffner Law can help you get the fair settlement agreed upon in your coverage.

With that said, get to know some of the insurers’ acts that will constitute first-party bad faith.


Payment Delay

Delaying your payment is the most common bad faith tactic used by insurers. When there is sufficient evidence of loss, and you have fully cooperated with the insurers, the court will consider any delays as bad faith.

Most insurers use this tactic to frustrate you and make you give up altogether on following up payments.


Inadequate Claim Processing

Failure to process your claim properly by the insurer constitutes bad faith. When processing your requests, they should verify your proof of loss, investigate, and inspect the site of loss and determine your coverage. After this, they should appraise and pay the amount of your damage.

Failure to cover all these steps adequately results in denial of your claim or payment of less money.


Unreasonable Claim Denial

With adequate evidence of your loss and determination of your coverage, it is only fair that you get paid. Most insurers in an attempt to maximize profits will unreasonably deny valid claims. If you have a genuine claim and your premiums are up to date, then this is an act of bad faith.


The explanation of what constitutes bad faith is not only limited to the above acts. The interpretation of bad faith is based primarily on the circumstances surrounding your case and coverage. As a policyholder, always get an attorney’s opinion on the best way to proceed if your insurer acts contrary to your contract.