What to Do When Insurance Companies Act in Bad Faith

When insurance companies deny legitimate claims, delay payments without reason, or refuse to investigate your case properly, they are acting in bad faith. Insurance entities have a legal obligation to handle claims fairly and in good faith, but many prioritize profits over policyholders’ rights. You have options to fight back against these unfair practices and obtain the compensation you deserve.

At Knowles Law Firm, our experienced personal injury attorneys know the tactics insurance adjusters may use to avoid paying valid claims. We help Nebraska residents hold insurance companies accountable when they do not honor their contractual obligations and act in bad faith toward policyholders.

What is an Insurance Bad Faith Claim? 

When an insurance entity acts in bad faith it may mean they failed to fulfill its duties under an insurance policy. Nebraska law requires insurance companies to operate honestly, fairly, and in good faith when managing claims. Bad faith practices can include unreasonably denying claims, delaying claim processing without justification, or failing to conduct proper investigations.

Companies may act in bad faith by offering unreasonably low settlement amounts for valid claims. For example, if you suffer serious injuries in a car accident and your medical bills total $50,000, but the insurance company offers only $10,000 without explanation, this could constitute bad faith. Similarly, if an insurer takes months to respond to your claim without providing updates or reasonable explanations for delays, they may be violating their duty to handle your claim promptly.

Another common bad faith practice involves misrepresenting policy language or coverage terms to deny claims. Insurance companies sometimes tell policyholders their claims are not covered when the policy language clearly indicates coverage exists.

What Steps to Take When Facing Insurance Bad Faith

Document every interaction with your insurance company from the moment you file your claim. Keep detailed records of phone calls, including dates, times, and the names of representatives you speak with. Save all written correspondence, emails, and claim-related documents. This documentation becomes crucial evidence if you need to file a bad-faith lawsuit later.

Request written explanations for any claim denials or delays. Insurance companies must provide specific reasons for their decisions. If they deny your claim, ask for the exact policy provisions they believe exclude coverage. If they delay processing, request a timeline for resolution and regular updates on your claim’s status.

Review your policy to understand your coverage and rights. Many policyholders do not fully understand their policies, which insurance companies sometimes exploit. Pay attention to coverage limits, deductibles, and any exclusions mentioned in the policy language.

Speak with a personal injury attorney at Knowles Law Firm who handles insurance bad faith cases. Representation is especially important when dealing with serious injuries, significant financial losses, or patterns of unreasonable behavior from your insurance company.

Legal Remedies for Insurance Bad Faith

Nebraska law provides several remedies for insurance bad faith victims. You may be able to recover the original claim amount plus additional damages for the insurer’s unreasonable conduct. These additional damages can include compensation for financial losses caused by the delay or denial, such as lost wages or additional medical expenses.

In some cases, you may also recover attorneys’ fees and court costs related to seeking your bad faith claim. This helps level the playing field against large insurance companies with extensive legal resources.

The key to successful bad faith claims is proving the insurance company’s conduct was unreasonable under the circumstances. Courts examine whether the insurer had a reasonable basis for denying the claim and whether they conducted an adequate investigation before making their decision.

Working with Experienced Legal Representation

Insurance companies often change their approach when you have legal representation. They know attorneys understand insurance law and will hold them accountable for bad faith practices. Having an attorney also ensures you meet all deadlines and properly document your case.

We help clients gather evidence, communicate with insurance companies, and file lawsuits when necessary. Our goal is to obtain fair compensation while protecting your rights throughout the process. We also help clients understand their policies and identify when insurance companies are not honoring their obligations.

Remember, insurance companies are businesses focused on profits. They make more money by paying less to policyholders, which sometimes leads to bad faith practices. You do not have to accept unfair treatment from your insurance company.

Contact Knowles Law Firm for Insurance Bad Faith Cases

Insurance bad faith cases require experienced legal representation to navigate complex insurance laws and hold companies accountable for unfair practices. At Knowles Law Firm, our attorneys have 55 years of experience fighting for Nebraska residents against large insurance companies. We have secured multi-million dollar settlements for our clients and understand the tactics insurers use to avoid paying valid claims.

Our family-owned firm provides personal attention to every case, with attorneys who answer their own phones and return calls promptly. We work diligently to move cases forward quickly so you can receive fair compensation and move on with your life. If you believe your insurance company is acting in bad faith, contact us at (402) 431-9000 or through our contact form to discuss your case.