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Bad Faith Insurance Tactics & Examples

Posted on April 18, 2022 in

Insurance companies have a duty to investigate and settle claims in good faith. Unfortunately, not all carriers uphold this responsibility. If an insurer acts in bad faith, it may be liable for any damages that result from its actions.

It is difficult enough to file an insurance claim, but identifying bad faith tactics can be even more challenging. The following tactics are some of the most common examples of the ways that insurance companies act in bad faith.

bad faith insurance tactic examples

#1: Denying a Claim without Valid Reason

When an insurance company finishes investigating a claim, it must issue a decision. If it chooses to deny the claim, the company must provide a reason. Usually, claims are denied due to insufficient evidence or lack of coverage.

However, if a company denies a claim without providing a reason, it is acting in bad faith. The insurer also acts in bad faith if it denies a claim for an invalid reason. For example, a company may state that an accident is not covered under the policy, despite the terms stating otherwise.

#2: Failing to Conduct a Thorough Investigation

Insurance companies must conduct a complete investigation into any claim that they receive. If a company fails to review all pieces of relevant evidence and thoroughly investigate the claim, it may be liable for bad faith tactics.

For example, say that you are filing an accident claim in Portland for injuries that you sustained in a collision. The insurance adjuster rules that your injuries were pre-existing without reviewing your medical records and denies your claim. This is an example of bad faith tactics.

#3: Refusing to Pay a Valid Claim

Insurance companies must pay claims that are valid under the terms of the policyholder’s coverage. If a company denies a valid claim or refuses to pay out your settlement, you could hold the carrier accountable in a lawsuit.

#4: Unreasonably Delaying a Claim

Insurance companies have a duty to investigate, negotiate, and settle a claim in a prompt manner. Oregon law requires insurance carriers to acknowledge a claim and provide all required forms within 30 days after receipt.

Additionally, the insurer must complete the investigation of the claim within 45 days. Then, the company will need to provide a decision to the claimant within 45 days of receiving the required forms.

If the company needs additional time to investigate the claim, it has a duty to notify the claimant about the delay. In situations where a company fails to abide by these rules and delays a claim for an unreasonable amount of time, it may be liable for bad faith tactics.

#5: Engaging in Deceptive Practices

Some insurance companies engage in deceptive practices that are designed to prevent claimants from recovering compensation. For example, the company may fail to disclose that you hold a certain coverage so that it can avoid paying you. It may fail to provide you with the required forms before a deadline. Any act of deception is an act of bad faith.

Contact a Portland Bad Faith Insurance Attorney

If you believe that you have experienced bad faith tactics, you have the right to hold the insurance company accountable. In these situations, you need a Portland insurance claim attorney on your side who can represent your lawsuit and fight for your right to compensation. As soon as you suspect that your insurance company is acting in bad faith, consult with a lawyer to discuss your legal options.