10 Things Your Insurance Company Doesn’t Want You to Know.
Whether you will recover damages from an insurance company and how much you will recover often depends on your knowledge of your policy and how the insurance company administers your insurance claim.
Knowing these 10 principles will help you to take on your insurance company and maximize your claim.
1. An insurance company must act in utmost good faith in their dealings with a policy holder.
An insurance company cannot cause an unreasonable delay in settling your claim or put its financial interests ahead of yours. They cannot lowball your claim by paying less than its true value. Insurance companies cannot use deceptive tactics or trickery in sales or claims handling. In essence the insurance company must treat you fairly. If they don’t, they have breached their duty of good faith which the law imposes on insurance companies. It exposes the carrier to potentially significant damages.
2. If an insurance company breaches its duty or treats you unfairly they may be compelled to pay your attorney fees.
So your insurance company has unreasonably denied your claim or delayed settling it and you have had to hire an attorney to make them treat you fairly. Your attorney will go after them and force them to pay your attorney fees.
3. Your insurance agent misrepresented your policy coverages or other material fact or detail regarding your policy, the insurance company can be forced to honor what your agent had told you.
Insurance agents have been know to misrepresent exactly what a policy covers, the limits of coverage, the effective date of coverage and many other aspects of insurance policies. Sometimes this is intentional on the part of the agent. They exaggerate policy coverages or the benefits of the policy to make a sale. Other times, the misrepresentation is inadvertent. It can be caused by the agent being confused about which policy he/she is selling or that the agent is not familiar with the product or due to a change in policy that the agent was unaware of. In any event, in most cases, the insurance company is responsible for the representations that the agent makes. Your attorney may be able to compel the insurance company to honor the representations of agent.
4. If your insurance coverage is not sufficient to cover your injuries because your agent recommended a lesser amount of coverage, the insurance company may be forced to pay.
It is always a good idea to take notes when dealing with your insurance agent and to keep those notes in a file with your policy. You may also choose to communicate by email with him or her so that their is less deniability in what they recommended. Sometimes when you are shopping around for less expensive coverage, your current agent may recommend that you reduce your coverage amount to save on the premium. This is a tactic used to keep your business with a lower premium but it may not be in your best interest if the coverage is insufficient to cover your loss or medical expenses. If this occurs, your lawyer may force the insurance company to pay an amount that is sufficient to make you whole again.
5. Anything that is ambiguous in your policy must be resolved in your favor.
Anyone who has ever read an insurance policy knows it is pages and pages of legal terminology and rhetoric. It is often difficult for even attorneys to understand what it covers and what is excluded from coverage. Often times insurance companies will leave wiggle room in the policy that is not clear to anyone as to the coverage and limitations of a policy. These ambiguities will often be used by the insurance company to deny claims but, if you know the law, you can call the insurance company on this little trick of theirs and insist that the claim be resolved in your favor based on the ambiguous language of the policy. You will likely need to consult with an attorney to take on this issue with your insurance company.
6. The insurance company demonstrate why a claim is not covered.
Frequently this is misunderstood by policy holders. It is not a policy holder’s duty to prove that their claim is covered by their insurance policy but, rather, it is the insurance company’s duty to either pay the claim or demonstrate to you why the claim is not covered by the policy. The insurance company must use the facts and evidence of the claim and their investigation of the claim and then apply that to the specific coverages of the policy. Don’t let the insurance company bully you. Provide them whatever they may ask for but if they deny your claim without proper explanation for the denial, call your attorney. He or she may be able to force the insurance company to pay.
7. Your insurance company may have a duty to defend you against lawsuits.
Every business, homeowner, auto or similar insurance policy has a liability portion of the policy that protects you from lawsuits by others. This requires your insurance company to pay your legal defense costs and fees if you are sued. Often, an insurance company will refuse to honor their duty to defend you because you have been sued for something that is not specifically covered in the policy. But, it must defend you in any situation which potentially seeks covered damages in most situations. For example, if a complaint is filed against you do not see damages within the scope of your overage but is capable of being amended or modified to include such damages, your insurer must defend. Furthermore, if the insurance company learns of facts from any source which would trigger coverage (not just the complaint itself), it must also defend you. In addition, it must defend where the policyholder has a reasonable expectation that it will do so. You will likely need to seek out the assistance of a lawyer to demand that they insurance company pay for your representation.
8. Your insurance company may unlawfully try to cancel your coverage after you have made a claim based on a misrepresentation that you may have made.
Insurance policies can be extremely complicated and they are often drafted based on information that you have provided to your agent or in a questionnaire without having all of the information you needed to properly answer the questions. If you have provided the insurance company with incorrect information, whether you did so intentionally or inadvertently, an insurance company may try to deny you claim because of this misrepresentation. Insurance agents will also modify your information or lead you to answer a question in a certain way so that you won’t be denied coverage. But, whatever the reason, if you provide false information to the insurance company they may attempt to deny your claim. A qualified lawyer can however examine your case and use the prevailing law to force the insurance company to pay your claim.
9. Punitive damages are awardable against insurance companies for unreasonably refusing to cover a claim of a policy holder.
Knowing that the insurance company must do or not do the items above, you hold a powerful weapon in your arsenal. Using the threat of punitive damages for violating your coverage rights or breaching their duty of good-faith that they owe to you, an insurance company may think twice before denying your claim. In most cases however, you will need to contact an attorney to assist you before the insurance company will take you seriously.
10. Get free advice from an attorney before it is too late.
Most attorneys will give you free advice in cases where the insurance company has acted either in bad-faith or unreasonably denied your claim. Often they will take your case against the insurance company without any out of pocket cost to you. So, it is better to get a lawyer involved in your case sooner than later. In some cases you have a limited time to take action, so call today if you are experiencing this kind of problem.