Insurance companies make money by not paying out claims. It is just the way insurance works. If they paid out the maximum amount their claimants were owed on each claim, only the most well-funding insurance companies would survive. But, sometimes car insurance companies act in bad faith and deny, stall or make unreasonable demands. They also commit outright fraud.
What is bad faith?
Bad faith or unfair claims practices occur when an insurance company lies, denies, unreasonably stalls or makes unreasonable demands of their customers, who have valid and legitimate insurance claims. Illegal lies can also be misrepresentations of policy language, limitations or exclusions. To be clear, bad faith is an issue throughout the insurance industry, not just in auto insurance.
What is not bad faith?
You and your insurance company can disagree on the adjuster’s opinion. This does not mean the insurance company is acting in bad faith, but the adjuster must provide reasonable support for their findings. In addition, you must be allowed to also offer contradictory evidence, and it must be taken seriously as well. If they refuse any evidence contrary to their adjuster, or if the adjuster refuses to give their basis, then bad faith has likely occurred.
Insurance company liability
Every state has laws against bad faith insurance practices, but sometimes, they are called unfair claims practices. When companies violate these laws, they are usually responsible for damages in addition to the compensation that they originally owed their client. And, this is, generally, for expenses as well, like out-of-pocket expenses, borrowing fees to address damages, missed work, attorney’s fees, etc. Plus, in especially egregious cases that go to trial, juries commonly award punitive damages that are designed to punish the insurance company for their bad acts.
Fighting the insurance company
First and foremost, call your insurance company out that you believe they are using bad faith insurance policies and that you do not accept it. They will know this legal term and should stop immediately. If not, then you can report them to Mississippi’s Insurance Department. And, if the insurance company still refuses to do what is right, it may be time to call an attorney.