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Most of us carry insurance—on our homes, our cars, our lives. The insurance company that sold you the policy probably
tried to tell you that it was selling peace of mind. You make your payments every month, and then when you finally do have a
claim—surprise—it is denied. Sometimes, the denial is proper because the insurer truly does not cover the claim. What
then?
The answer is that you may have a claim against your insurer for an improper claims practice, or a “bad-faith” claim
as it is commonly called. Bad faith by an insurance company can occur any time an insurance company refuses to honor a legitimate
claim by someone it insures. Examples of bad faith include misrepresenting facts regarding coverage, not attempting to come to
a prompt and fair settlement of a claim, forcing an insured to sue by making “lowball” offers, and neglecting to investigate
the facts to determine whether a claim is covered or not.
There are laws that prohibit improper claims practices by an insurer, but, like all laws, they are not always followed. In fact,
insurance companies test the limit of the law every day, counting on the fact that the person with insurance is unlikely to go talk
to a lawyer and find out his or her rights. The reason for this is simple: every time that the insurer does not pay a claim
it should have covered, the insurer profits.
So how do you protect yourself? First of all, an insurance adjustor is not your friend. Once you make a claim that
could subject the insurer to liability, the adjustor is usually focused on keeping the size of the payout as small as possible. Be
aware that most insurance adjustors are not lawyers, and even the ones who are lawyers are not always correct when they say a claim
is not covered.
No matter what the adjustor tells you, talking to a lawyer is a good idea. A lawyer works for you, and he or she will be able
to tell you whether the claim is covered or not and whether the settlement offered is fair. Adjustors may tell you that the expense
of consulting a lawyer and the time it takes to pursue a case through the courts mean that you should take what is being offered right
now. Remember: The adjustor is not looking out for your best interests, and the “advice” not to talk
to a lawyer is intended to discourage you from finding out the facts.
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