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What are the parts to a bad faith insurance claim?

On Behalf of | Jul 24, 2019 | Firm News |

Recovering from an accident can be a difficult experience. Between damage to your property and healing from an injury, there are a lot of expenses, and you hope that your insurance will provide the coverage you paid for.

Over the months that you pay your insurance premiums, you hope you will never be in a situation where you need your insurance. Once you do need it, you are already in a vulnerable position. Unfortunately, some insurance providers will try to find ways to avoid covering your accident.

These are some indications your insurance company is acting in bad faith.

What is bad faith?

While some states use a common law approach, Minnesota, has a statute to protect residents against insurers who do not act in good faith. For a bad faith claim, you need to show that the insurer did not use a reasonable basis for denying your request or that the insurer had reckless disregard when they denied your claim.

What is a reasonable basis?

Although there may be some portions of the insurance agreement that seem ambiguous, the insurer is obligated to be clear about the reason for the denial. Some factors to watch for as you consider whether your denial was in bad faith may include:

  • Misrepresentation of what happened or of the relevant policy
  • Delay in receiving a denial
  • Failure to investigate your claim
  • Lack of explanation for the denial

Your policy may seem like a complicated agreement, but your insurance company made specific promises for covered claims. If they act in bad faith, you may be able to seek additional damages in addition to coverage of your initial claim.