This is the second installment of our two-part blog discussing common issues about bad faith insurance practices. While you do not need to read Part I prior to reading this post, we invite you to do so. If you still have questions about your specific situation, you are welcome to contact Miami insurance bad faith attorney J.P. Gonzalez-Sirgo.
What should I do if I need to file a claim with my insurance carrier?
The first task is to immediately notify your insurance company of your claim. After you have provided notice, you should review your entire insurance policy and highlight provisions that might be relevant to your claim. When you communicate with your insurer to provide notice of your claim and information needed to process the claim, you need to document everything. Your records should reflect the date and time every contact occurred, the person with whom you communicated and the substance of the subject matter. Whenever possible, these communications should be in writing, or you should follow up telephone calls with a confirming letter. It is important to be aware of all deadlines in your policy because failing to meet designated timing requirements can result in forfeiture of your claim.
What are my options if my insurance company is engaged in bad faith?
If you insurance company is acting in bad faith, you have several available options. One option is that you can attempt to negotiate directly with your insurance company. This might include hiring your own contractor to inspect your property and provide an estimate of the cost of repair. If you obtain your own estimate of the cost of repair, you have a concrete basis for a meaningful negotiation with the insurance company. However, insurance companies negotiate thousands of these claims annually, so an insured is at a distinct disadvantage when taking this approach. An even less attractive option is to simply give up. While this might seem like no option at all, you would be surprised by the number of people that simply accept the insurance company’s denial of their claim.
The final option is to contact an insurance claims attorney and fight back against the insurance carrier. Insurance companies sometimes become more reasonable because they now know they must justify their position. The insurer also knows that the insured will have a better understanding of his or her rights and remedies, which includes seeking extra-contractual damages through a bad faith legal claim. Even if your attorney files a bad faith lawsuit, these cases frequently settle prior to trial.
What motivates insurance companies to act in bad faith?
While the ethics and fairness of bad faith tactics by insurance companies can be questioned, the economics of such a strategy make sense. An example offers the best way to understand the economic rationality of bad faith tactics. For example, the insurance company might deny a thousand claims outright. Of these claims, fifty policyholders dispute the denied claim. The insurance company might then change its position and pay forty of those claims, and the remaining ten policyholders pursue an insurance bad faith claim. If five of those policyholders win bad faith lawsuits and receive millions of dollars, the insurance company still comes out far ahead because of the 950 people who elected not to dispute the denied claim. Further, the money not paid out on those other 950 claims continues to remain invested increasing the financial benefit to the insurance company.
If an insurance company delay, denies, or lowballs your claim, you should consider speaking to an experienced Florida property damage attorney. 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.