Before Filing A Lawsuit, Know Different Types of Bad Faith Insurance

What do you mean by bad faith insurance? It is actually the denial of a claim that it is the insurer’s duty to cover and they are expected to practice good faith and fair dealing. This good faith is a covenant and part of each contract. There are many ways through which an insurance company can practice bad faith and it has been seen multiple times in Oklahoma City. It is the reason behind many people of the city regularly seeking help from the lawyers of Oklahoma City.

To make them understand better, here we will differentiate types of bad faith.

First Party Bad Faith

Here are the acts that can be tagged as first party bad faith.

Inadequate claim processing – Being reluctant to investigate an insurance claim on time to deprive the client of the claim is known as bad faith. Here the company might not verify proof of loss of the insurer, investigate and inspect the claim, fix the coverage and pay or deny the claim.

Improper/inadequate claim investigation – If an insurer, intentionally or not, fails to investigate a claim, this can give rise to bad faith. For an example, if an insurer receives a case from a homeowner due to water damage and rejects the claim, it should be called bad faith. Under this circumstance, bad faith insurance lawyer can help you to come out of the mess.

Delaying your payment – Delaying to pay your legitimate claim is unethical and bad faith insurance practice. For example, when your building is insured properly, delaying to pay you for more than one year after a fire has broken out is unethical.

Third Party Bad Faith

Here are a few examples of third-party bad faith insurance.

Failure to Settle – When an insurer fails to settle an underlying suit against a justified claim is called bad faith. If the insurer fails to settle the claim when the applicant is within policy limits is bad faith also. Honorable courts have ordered insurers to pay interest on insured accounts’ while engaging them in negotiations. If the insurer fails to tell the insured about settled demands, this is also an example of bad faith.

Failure to defend – When an insurer fails to defend the insured, it is bad faith. There are many underlying actions by the third party from which insurer should protect the insured, otherwise, it is bad faith and if you are a victim of this condition, you should call a bad faith insurance lawyer.

Negligent – If the insurer who undertakes your claim is negligent on your defense or claim, this is considered as bad faith.

If you are constantly being rejected for your claim, as a citizen of the United States, you have the right to speak to a bad faith insurance lawyer. If you reside in Oklahoma City, contact The West Law Firm for guidance and suggestions.

** Disclaimer: The above article does not imply a relationship between attorney and client, nor is it legal advice.