Most people think of insurance fraud and picture those who misrepresent themselves to swindle money out of insurance companies, but sometimes it is the individual who is the victim of fraud. Insurance companies can engage in fraudulent activities by refusing coverage to an individual for conditions that should be covered, denying insurance claims, refusing to investigate claims made, and underpaying claims. Sometimes insurers are not prohibited to engage in these fraudulent activities, leaving the law open for you to fight the system to get what you deserve.
Insurance contracts are made under the assumption that both parties will treat each other fairly and act in good faith. A violation of this contract is illegal and the court can uphold the statute that the insurance company has not acted in good faith. Many of the insurance departments in state governments have the power to investigate claims that an insurance company is acting fraudulently and can fine the company severely. However, sometimes the state departments choose to take no action, and it becomes up to you, the individual, to file a lawsuit to get compensation. Some ways you may be able to claim insurance fraud include:
Delay in processing a claim. By law, insurance companies must respond to a claim within a short time period stated in the company guidelines and prescribed by law. Companies must accept or deny a claim within this time frame, or else provide notification that more time is needed to process the claim.
Deliberately undervaluing a claim. If you feel the insurance company has purposefully undervalued your claim or paid less for a claim than what was stated in the policy, you may have a successful lawsuit.
Not properly investigating a claim. Most insurance companies have minimum standards they must follow when investigating a claim. If you have not been contacted regarding claim, the insurance company could be penalized for not properly investigating the claim. In addition, if you can find that the insurance company ignored several key details, you may be able to claim fraud.
Improperly denying a claim. Insurers cannot just deny a claim without due reason. They must provide a written explanation for why they are denying the claim within a certain timeframe and ensure that the victim receives proper notification. If the claim appears to be denied without just cause then the denial is illegal.
Many of the insurers who violate these laws will be required to compensate claimants for denied claims and pay damages in addition to any punitive damages or fines paid to the state. If the insurance company causes further damage to an individual based off its bad faith actions, they may be liable to pay a personal tort, or injury, suit. If your insurance is provided through an employer, however, you may not be eligible to file a bad faith claim. Contact our lawyers for more advice on dealing with the situation.
Whether you have a simple claim denial or feel you have been paid less than the amount promised, our lawyers can assist in making sure the insurance companies do not take advantage of you. Call us today for advice on getting the most out of your insurance policy.