Our Texas Insurance Dispute Lawyers Share How Insurance Companies Try to Unfairly Deny Claims
Insurance should provide peace of mind and financial protection when you need it most. But what happens when your insurance company doesn't hold up its end of the bargain? At Dortch Lindstrom Livingston Law Group, we've seen how insurers sometimes prioritize profits over policyholders' well-being.
If you're struggling to get your insurance company to pay your claim, you might wonder if they're acting in bad faith. While the definition of bad faith varies by state, there are some general warning signs and how our insurance dispute lawyers can help prevent you from being unfairly taken advantage of.
1. Ignoring Your Claim
You've diligently paid your premiums, and now it's time for your insurer to fulfill their obligations. However, one of the first signs of bad faith is when they fail to acknowledge receipt of your claim.
Imagine sending multiple emails, leaving voicemails, and even sending certified letters—only to receive silence in return. This tactic, often used by unscrupulous insurers, is designed to frustrate policyholders into giving up. At Dortch Lindstrom Livingston Law Group, we've seen many cases where insurers use this delay tactic—hoping claimants will abandon their valid claims out of frustration.
2. Adding Unnecessary Delays in Processing Your Claim
Another red flag is unnecessary delays in processing your claim. While some claims require thorough investigation, there's a fine line between due diligence and deliberate stalling.
For example, if your home is severely damaged in a storm and you provide all necessary documentation, yet your insurer keeps asking for more information month after month, this could be a deliberate delay tactic. This causes significant financial and emotional distress as you struggle to make your home livable again.
3. Rejecting Valid Claims Without Justification
The most blatant sign of bad faith is when an insurance company denies a valid claim outright. This practice is not only unethical but often illegal. At Dortch Lindstrom Livingston Law Group, we've seen cases where insurers deny claims for covered events—hoping policyholders won't challenge their decision.
For example, life insurance policy claims are often denied based on a supposed preexisting condition that was neither disclosed in the policy nor relevant to the cause of death. Legal intervention can expose this bad faith practice and secure the rightful payout for the grieving family.
4. Failing to Explain Why Your Claim Was Denied
Even when an insurance company denies a claim, they must provide a clear explanation for their decision. If your insurer denies your claim without offering any reasons or provides vague explanations, this could be a sign of bad faith.
We've seen situations where insurers send denial letters filled with jargon and vague references to policy exclusions, leaving policyholders unsure of their next steps. Our insurance dispute lawyers at Dortch Lindstrom Livingston Law Group believe in transparency and will work tirelessly to demand clear explanations for any claim denials.
5. Having Excessive Requirements to File Your Claim
Insurance companies have the right to request relevant information to process your claim. However, when these requests become excessive, unreasonable, or irrelevant to your specific claim, it may be a sign of bad faith.
For example, if your car is totaled in an accident and the insurance company asks for years of maintenance records—including oil change receipts—this is unreasonable. Such demands are often a trick to wear down claimants and discourage them from pursuing their rightful compensation.
6. Misrepresenting Policy Coverage and Terms
A simple mistake isn’t bad faith, but insurers must clearly communicate what is and isn't covered. Bad faith practices often involve misrepresenting policy coverage during the sales process or when a claim is filed.
We've seen cases where policyholders were assured of certain coverage during the sales pitch, only to discover during the claims process that these assurances were false. Our insurance dispute lawyers carefully review policy documents and sales communications to hold insurers accountable for their representations.
7. Changing Policy Terms After You Filed Your Claim
Imagine you've filed a claim, confident in your coverage, only to be told that the policy terms have changed. Altering policy terms retroactively after a claim is filed is a clear indication of bad faith.
Dortch Lindstrom Livingston Law Group has the experience needed to challenge changes in policy terms. Our attention to detail helps us spot these attempts at cheating you out of what you’re owed when you have a valid car insurance, life insurance, health insurance, or homeowners insurance claim.
8. Threatening You
Insurance companies are supposed to be your allies in times of need. If a claims representative resorts to making threatening statements or using intimidating language, it's a clear sign of bad faith. If you’ve paid your premiums, you don’t deserve to be bullied when you’re trying to process a claim.
We've encountered situations where insurers have threatened to cancel policies, raise premiums exorbitantly, or implied legal action against policyholders who persist in pursuing their claims. Our legal team won’t tolerate these bullying tactics.
9. Failing to Disclose Policy Limitations and Exclusions
Transparency is crucial in insurance contracts. If your insurer failed to clearly disclose policy limitations and exclusions before you purchased the policy, they might be acting in bad faith.
We've seen cases where policyholders were shocked to discover significant exclusions buried in fine print or not mentioned during the policy purchase. Our insurance dispute lawyers will thoroughly investigate your claim to uncover any failure to disclose crucial information related to your coverage.
10. Underpaying Your Claim
Even when insurers agree to pay a claim, they may still act in bad faith by deliberately underpaying or using deceptive practices to reduce the payout. This can include using outdated pricing data, ignoring certain damages, or applying excessive depreciation.
If you receive an offer you believe is unfair, don’t sign anything until you contact our insurance dispute lawyers. Our skilled negotiators will work to secure a fair settlement that reflects the extent of your losses. From our offices in Plano and Houston, we serve clients in Texas and throughout the United States.