Insurance companies often operate in “bad faith” meaning that they don’t treat you and your claim with the utmost respect. What is bad faith in homeowners insurance? Bad faith in homeowners insurance claims usually entail deception, misrepresentation, and failures on the part of the insurance company.
Click the link to this video on YouTube to help further understand “What is Bad Faith in Homeowners Insurance?”
(23) What is Bad Faith in Homeowners Insurance? – YouTube
SPECIFIC EXAMPLES OF BAD FAITH
Bad faith refers to situations where an insurance company fails to fulfill its contractual obligations to the policyholder. It involves unfair, deceptive, or dishonest practices that can manifest in various ways, including:
a) Unreasonable claim denials: Insurance companies may deny or undervalue legitimate claims without proper investigation or valid reasons, hoping that policyholders will accept their decisions without questioning.
b) Deliberate delays: Insurers may unreasonably prolong the claims process, causing unnecessary frustration, financial strain, and hardship for policyholders who are waiting for reimbursement or repairs.
c) Inadequate investigation: Insurance companies have a responsibility to investigate claims promptly and thoroughly. However, in bad faith cases, insurers may conduct inadequate investigations, neglecting crucial evidence or failing to send a qualified adjuster to assess the damages.
d) Lowball settlement offers: When making an offer to settle a claim, insurers may intentionally undervalue the loss, making it difficult for policyholders to fully recover and restore their property to its pre-loss condition.
NOTICING SIGNS OF BAD FAITH EARLY
When you are going through the claim process you might notice some early signs that Bad Faith is showing up in your claim. Here are some examples:
a) Unexplained delays: If an insurer consistently fails to provide updates on your claim or prolongs the process without a valid reason, it may be acting in bad faith.
b) Contradictory statements: Inconsistent information from adjusters, contradictory policy interpretations, or arbitrary changes in claim requirements could be signs of bad faith.
c) Refusal to communicate: If your attempts to reach out to the insurance company or its representatives are consistently ignored or met with dismissive responses, it may indicate bad faith.
d) Intimidation tactics: Threats, harassment, or attempts to pressure you into accepting an unfair settlement offer can be clear signs of bad faith.
WHAT CAN YOU DO TO FIGHT BACK AGAINST BAD FAITH?
In Florida, before you can proceed with a bad faith action you need to file a CRN also known as a Civil Remedies Notice. Filing a Civil Remedies allows you to pursue bad faith after the conclusion of your claim based on a few specific circumstances. Let’s take a look at what the Civil Remedies Notice looks like.
WHEN CAN YOU FILE A CIVIL REMEDIES NOTICE?
You can file a civile remedies notice (CRN) at any time but generally, these are the times that are most common in Florida:
- Prior to Filing a Lawsuit
- Prior to Demanding Appraisal
- 60 days into the Appraisal
- Anytime during the claim process
- During a Lawsuit
NOTE: The above examples are for the State of Florida. Other states might have different criteria and procedures to follow.
WHEN CAN YOU PURSUE THE BAD FAITH ACTION AGAINST THE INSURANCE COMPANY?
You can only pursue a bad faith action against the insurance company when one of these conditions have been met and the Civil Remedies Notice has been filed:
- You go to trial and win
- After conclusion of your appraisal
CONCLUSION
While homeowners insurance is meant to protect us during challenging times, bad faith practices by insurance companies can undermine this trust. By understanding what constitutes bad faith and recognizing the warning signs, you can safeguard your rights and take action when necessary. Remember to document everything, consult with legal professionals, and report any suspected bad faith to the appropriate authorities. By holding insurance companies accountable, we can strive for a fair and transparent insurance industry that fulfills its obligations to policyholders.
