Bad Faith Life Insurance Claims
When an individual purchases a life insurance policy, they pay premiums to the life insurance company with the understanding and expectation that the beneficiary will receive a monetary death benefit when the insured dies. In many cases a life insurance policy is purchased by the primary earner in the family so that if he or she dies unexpectedly, the surviving spouse and children will have funds to live on. Purchasing a life insurance policy is often a generous and loving gesture to assure a safety net for beneficiaries.
But what happens when the life insurance company refuses to pay the beneficiary after the death of the policyholder? Or when they engage in other unfair, deceptive and illegal practices? There is a term for this:
- Bad Faith Practices
Life Insurance Company Bad Faith Practices; Florida Statute 624.155
There are numerous Florida statutes pertaining to insurance matters. Of particular relevance, Florida Statute 624.155 provides a civil remedy for victims of insurance bad faith practices:*
624.155 Civil remedy.—
(1) Any person may bring a civil action against an insurer when such person is damaged:
1. Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests;
*portions of statute removed for brevity
Examples of Life Insurance Bad Faith Practices include, but are not limited to, the following:
- Refusing to settle
- Refusing to settle promptly
- Completely denying legitimate claims
- Refusing to investigate legitimate claims
- Refusing to investigate legitimate claims in a timely manner
- Cancelling valid policies by falsely asserting that premiums were not paid
- Delaying and stalling by utilizing various tactics – e.g., falsely asserting that documentation, proof of death, medical information or other information was not received
- False assertions that the deceased’s application contained one or more “material misrepresentations”
- Using the two year contestability period simply as a stalling tactic
- Lowballing – e.g., “accept this low offer or nothing at all”
- Acts of intimidation by the insurance company, including threats of nonpayment
- False accusations of insurance fraud
Why do insurance companies often refuse to pay or delay even though they have a contractual and legal obligation to do so? Profit is the motive. By holding on to claimants’ money for days, weeks, months or years, they are able to invest massive amounts of money and earn greater returns.
Most people are surprised to learn that there are literally thousands of bad faith complaints every year in Florida alone. The CBS News Show 60 Minutes investigated bad faith practices and discovered that Florida’s life insurance companies did not even attempt to contact thousands of beneficiaries and give them the death benefit payments they were entitled to. It is inconceivable that these companies get away with bad faith practices, but in many cases they do.
You can reach Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].