5 Most Common Bad Faith Insurance Practices Used to Deny or Underpay Hail ClaimsDecember 16, 2016
Insurance companies owe a duty of good faith and fair dealing with their insureds. These duties are usually codified into state insurance laws. Simply put, bad faith is when an insurance company fails to act in its policyholder´s best interest. Unfortunately, bad faith insurance practices are far too common in the context of natural disasters such as windstorms and hailstorms.
Insurance companies are in the business of making money. They have financial objectives to reach every year. To accomplish those objectives, they need to cut expenses and reduce losses from claims as much as they can. They accomplish their objectives by keeping and investing as much as the premiums they collect from policyholders as possible by wrongfully denying or underpaying valid claims. Unfortunately, this bad faith practice is rampant when dealing with hail claims. Insurance companies are creative in coming up with bad faith reasons to deny and underpay claims. The following are the 5 most common bad faith insurance practices used by insurance companies to deny or underpay hail claims:
- Misleading the homeowner about their right to hire an attorney. The insurance company usually will not tell the policyholder that attorney fees are recoverable if the policyholder proves the claim was handled in bad faith
- Failing to thoroughly inspect damages. The insurance company´s adjuster ignores or fails to inspect all of the damages.
- Claiming the damages pre-existed. The insurance company´s adjuster may falsely attribute hailstorm-related damage to pre-existing damage or routine wear and tear.
- Stalling. Insurance companies may just stall and go in circles with the policyholder or delay the payment process for years until the statute of limitations runs.
- Offering quick settlements early on to force financially burdened policyholders to surrender or settle.
There are definitely more tactics that insurance companies resort to in order to deny or underpay hail claims but these are the most common ones. Therefore, you should contact an experienced attorney if you believe your property has been damaged by a hailstorm and you feel that your insurance company is wrongfully denying or underpaying your hail claim.
The attorneys at the Amaro Law Firm have vast experience dealing with insurance companies. In fact, some of their attorneys worked as insurance company defense lawyers before joining the firm. Now, they help property owners fight for fair and just treatment. Our consultations are free. If we cannot add value to your claim, we will not take your case. When an insurance company is found to have acted in bad faith, they are required to pay reasonable attorney’s fees. Therefore, we are only paid if we win. Contact us for a free claim evaluation.