Bad Faith Insurance Claim Investigation
A bad faith insurance claim investigation involves the legal examination of a policyholder's claim to determine whether the insurance company acted in bad faith in any manner. Bad faith can be defined as an insurance company's failure to uphold its fiduciary duties in its contract with the policyholder. Bad faith may take many forms, including when an insurer:
- doesn't conduct a valid investigation of a claim
- delays the resolution of the claim (in myriad possible ways)
- pays only part of the appropriate amount of benefits
- unreasonably denies a policyholder's claim
When wrongdoing by an insurance company is suspected, a bad faith insurance claim investigation can be conducted to determine whether an actionable offense has been committed.
Insurers' Duty to Act in Good Faith
All insurers have a duty to act in accordance with good faith and fair dealing principles. This means that the interests of the insured are to be given priority over the interests of the company. Insurers are supposed to find a way to honor a policyholder's claim rather than looking for ways to deny it. They must also comply with all applicable state and federal laws (including ERISA, COBRA, and HIPAA). Failure to adhere to these guidelines may result in:
- a bad faith insurance claim investigation
- litigation
- penalties imposed on the insurer, including compensation for the insured
Identifying the Insurer's Wrongdoing
For example, a bad faith insurance claim investigation conducted by a law firm can identify the reason—or lack of a reason—for the denial of a claim. Insurance companies have a financial incentive for denying policy benefits. Typical insurance company arguments are:
- proper documentation was not received in a timely manner
- a certain benefit is not covered
- additional information is necessary
Knowing the Provisions of Your Insurance Policy
It is helpful for consumers to familiarize themselves with the specific provisions set forth in their insurance policies. In cases where insurance is provided by an employer, individual employees may not have received a copy of the policy in its entirety. However, employers have the right to access this information upon request. Analyzing the terms of an insurance policy is often the first step in the bad faith insurance claim investigation process.
An Internal Investigation May Be Conducted First
In many cases, an insurance claim investigation must first be handled through the insurance company's appeals or grievances department. The insurer conducts its own investigation to determine whether to uphold the denial of a claim or pay the benefits. Once the company's internal investigation is completed, the insured may then use the option of seeking a legal remedy for the bad faith.
If you suspect you're the victim of a bad faith insurance practice, it's in your best interest to contact an experienced insurance attorney as soon as possible. An experienced insurance attorney knows the laws applicable to your case, and he or she can conduct a bad faith insurance claim investigation to protect your legal rights and options. For more information, contact us today.
Be assured your matters will be in experienced & caring hands.
