When we choose an auto insurance agency to take care of our insurance needs, we trust them to not only be able to give us a fair deal on a policy that best suits our driving habits, financial needs, and the needs of our vehicle, we trust that they will uphold our policy’s contract and pay out if we get into an accident. Most of the time, insurers do what they need to do. Sometimes, however, mistakes—either unintentional or intentional—do happen.
Unintentional mistakes are usually quickly corrected, but rarely auto insurers have been known to act outside of a set insurance policy or deny a claim altogether when one is made. They may also try to unfairly limit the amount of compensation the claim disburses or pays out.
If you’re in a situation where this happened or you feel it did, it’s important to contact the insurance company and question what happened and why. After contacting your insurer, your next step may be to file a claims dispute with your state’s insurance department. If the claims dispute is denied, you may then need to take further action with the assistance of an attorney.
In the legal world, we refer to these types of cases as insurance bad faith claims because they are an attempt to resolve a situation where an insurer is acting “in bad faith” by not fulfilling their end of the contract. These types of claims hold an insurance company liable for acting unfairly or unlawfully.
Ways Insurers Make Mistakes
There are many ways that an auto insurance company can make a mistake or act in bad faith. First, we’ll go over why accident claims are typically denied or resolve with a lower disbursement amount than expected:
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Reasons for Denial
When an accident claim is completely denied, the insurer will often justify the denial using the following reasons:
- Unsatisfactory policy coverage (if, for example, you don’t have comprehensive coverage, but tried to open a claim for an act of vandalism to your vehicle)
- For finding false information, such as from when the insurance policy was first created
- For breaking the law, such as driving without a license
- Expired or lapsed coverage
- For failing to report the accident to the police or the insurer
- For not seeking medical attention right after the accident occurs (if you’re seeking compensation for injuries you’ve sustained yet not seen a doctor, for example)
Reasons for a Lower Disbursement Amount
When a claim’s payout is lower than expected, the insurer will often justify the difference using the following reasons:
- Policy limit reached (if your claim is greater than your coverage limits, you will not be given extra coverage)
- Unsatisfactory policy coverage
- For not seeking medical attention right after the accident occurs, or for not following up on medical care that would be expected of the injuries you’re seeking compensation for
- For false information
In both of these above situations—whether an accident claim is denied or not rewarded fully—an insurance company can make a mistake or act in bad faith in multiple ways:
- Filing or administrative errors. Mistakes of this nature are more common than many people believe. The first step to take after you believe an administrative error happened is to double check all documentation, and then tell your insurance company. Everything down to the codes used should be checked for possible errors.
- Incorrect information. Was your insurer given the wrong information about the accident? Was the police report filed incorrectly? Accident claims require information from other parties, which can sometimes be delivered incorrectly. All third-party information needs to be verified as well.
- Incomplete information. It’s not uncommon for insurers to attempt to resolve a claim too quickly. If they did not ask for information that they should have, your claim may not be as complete as you thought it was. Similarly, your doctor may have not submitted all the correct information. If there’s something as crucial as a doctor’s note missing, for instance, your claim may be wrongfully dismissed.
- Acting in bad faith. If none of the above errors have been found yet you believe your claim was handled incorrectly or that it was wrongfully denied or you were rewarded the incorrect disbursement amount, it’s possible that your insurer acted in bad faith. Unfortunately, many insurance agencies try to save their companies money by “cutting corners” where they can and hoping clients won’t notice. If you find yourself in this situation, you can take action to hold them liable.
How to Hold an Insurer Liable
If you feel your insurer made an error or perhaps acted in bad faith, the first step, as mentioned above, is to confront your insurance company with the issue. Be sure to have any documentation or evidence on-hand and approach your insurer calmly. If the issue was, in fact, a simple error, it may be easily remedied at this point.
If your issue is not remedied at this step, you may have to file a claims dispute with your state. If the claims dispute is dismissed, the next step is to contact a law firm that is experienced in handling bad faith auto insurance claims. An experienced local car accident lawyer will often already be familiar with your insurer and how they typically do business, giving you an advantage if they choose to proceed with the case.
Taking action against an auto insurance agency who wrongly denied a claim, gave you an unfair claim disbursement, or otherwise acted unfairly can be a daunting task. By choosing to act, you may gain the compensation you need to recover from your accident while sending a clear message to the insurance agency that wronged you. Clients deserve to not be wronged. Insurance policies should be upheld. By being served with a legal claim against them, an insurer will likely stop acting in bad faith and start treating their clients right.
At Madia Newville LLC, our attorneys are experienced in complex car accident cases and are prepared to answer any questions you may have. Get in touch with our Minneapolis law firm today to learn how we can help.