If you have ridden the insurance claims merry-go-round with an uncooperative insurance carrier, you know that the claims process can be a headache. Your insurance company is essentially a service provider that you pay to provide a form of financial security if you experience property or liability loss. However, your insurer essentially becomes the fox guarding the henhouse when you need to pursue a claim. Insurance companies maximize profits by denying the very benefits that their customers pay to secure. Sometimes insurers use tactics of delay as an effective tool to avoid paying valid claims.
Unjustified tactics of delay constitute one of the most common examples of insurance bad faith. This is a practice used by insurance companies to avoid paying legitimate claims. These delays can be for an unreasonable period of time, or they can be premised on an arbitrary basis. Delays in the claims process generally work to the advantage of the insurer in a number of ways:
Bullying the Policyholder: While the insurance company experiences financial advantages from delaying payment of a claim, the passage of time can force an insured to settle for less than the full value of a valid claim. When time goes by without property damage to your home or business being repaired, financial hardships can mount. This financial pressure can compel a policyholder to accept an unfair settlement because of the financial need to repair damage, defend against a lawsuit or cover extra living expenses when the insured is forced from his or her home. The insurer might allege false allegations of crimes like arson or fraud and/or request unnecessary information and documents to justify delays in resolving a claim.
Generating Interest: A significant portion of an insurance company’s profits come from returns on investment and interest. When you make premium payments to an insurer, this money is invested to generate revenue. Once an insurance company must pay a claim, the money that would be used to pay the claim continues to generate interest or a return on investment until the check is cut to the policyholder or contractors to undertake repairs. If the insurer can stall payment, the carrier benefits from the return on investment using YOUR money. Put another way, the insurer is gambling with “house money,” and you are the house.
Punitive Impact: When an insurance company deals with a policyholder who aggressively pursues a claim or refuses a lowball settlement, the insurance company might drag its feet during the settlement process or delay paying the claim as retribution for asserting your rights to full and timely payment. When an insurance company uses this type of tactic, you should speak to an experienced Florida insurance claims attorney about pursuing a legal claim for insurance bad faith.
While insurance companies often use delay tactics, an experienced Florida bad faith insurance attorney can help you protect your rights and pursue the compensation that you are entitled to receive under your policy. If you have questions about Florida insurance claims, you are welcome to contact my Miami insurance claims dispute law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.