Spotting Bad Faith Insurance: Watch Out for These Warning Signs

The law requires insurance companies to engage in good faith efforts to reach agreements for damages with those having legitimate claims against their insured. Of course, that doesn’t always happen. Insurance companies bring in combined revenues in the billions of dollars every year, and those businesses have vested interests in holding on to them for as long as possible. Some breach their fiduciary duties in the name of higher profits. Bad faith insurance can occur in a number of ways. Our attorneys know the warning signs to watch our for — as a business owner, so should you.

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Phone Calls Going Unanswered or Not Returned for Weeks

A day between phone calls with an adjuster or other representative is normal — they’re busy people just like you and me. Calls ignored repeatedly may be a sign that the insurance company is engaging in bad faith practices. By stifling communications, the insurance company is hoping you’ll get discouraged and go simply go away. If you’re a business owner with storm damage in need of repair, the lack of communication might force you to repair the issues at of your own pocket — even after you’ve paid your premiums on time every month.

Insurance companies make money on what’s called “the float.” This is the time period between a policyholder paying a premium and the company paying out on a claim. The longer that period of time is, the more money the insurance company can make. In essence, they’re delaying the payment of your company’s claim to squeeze as much revenue out of the investment as possible, which is illegal.

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Total Denial of Duty to Provide Coverage

Denying responsibility for a claim is a popular tactic, and those who take the insurance company’s word as Gospel end up without the compensation they deserve. If you believe the insurance company’s position, the statute of limitations to pursue a claim on your company’s behalf may lapse, leaving you with no route to recover damages. The policy is what dictates the insurer’s obligation to provide coverage, not an adjuster or other insurance employee. Your attorney can review the relevant policy and make a determination as to whether or not the insurer is denying your claim unfairly.

Aggressively Defending Claims without Merit

In some instances, liability is clear. The policy clearly states that the insurer must pay damages for the covered event, and yet they continue to defend the claim, even losing money by going to court and filing motion after motion. These tactics attempt to wear down your resolve as a business owner and suggest that recovering what your company owes just isn’t worth the effort. If you give up, not only does the insurance company win, it sends a message to future claimants that filing legitimate claims aren’t worth the investment.

If your company is experiencing bad faith insurance in Pennsylvania, our business attorneys can pursue the insurer on your behalf to recover compensatory as well as punitive damages. Contact us today for an immediate consultation with our experienced legal team.