Insurance Bad Faith

How Does Insurance Bad Faith Occur?

Insurance bad faith isn’t limited to an outright denial of your claim. When an insurance company fails or refuses to deal with its insured or an injured third party with promptness and fairness the insurance company is guilty of acting in bad faith. Bad faith also occurs when the insurance company is holding up settlement, denying certain benefits but allowing others, or only partially paying claims, even though it is clear you deserve more.

Can You File a Claim Under the Montana Unfair Trade Practices Act?

Under Montana Law, an insurance company can be sued for statutory or common law bad faith. Statutory bad faith claims arise when and insurance company violates any of the prohibited acts set forth within the Montana Unfair Trade Practices Act (UTPA) An insurance company that performs any of the following acts, has violated the Montana UTPA.

• Denial of Coverage without Reason: Under Montana law, coverage exclusions for insurance policies are narrowly construed. This means that the insurance company must have a reasonable basis or an obvious reason for denying coverage to their insured. Insurance coverage disputes almost always require the assistance of an experienced insurance coverage attorney like Matt Tourtlotte.
• Failure to Investigate the Claim: When you file a claim, the insurance company must investigate it before they can deny it. Furthermore, the insurance company must investigate the claim with reasonable promptness. The insurance company is acting in bad faith if they deny the claim before considering the matter, if they deny the claim without considering all the available information, or if they unreasonably delay the investigation of the claim.
• Leaving a Claim Open for too Long: You have insurance so that if a claim arises, you won’t have to personally bear the burden of a big monetary loss.
• If the insurance company isn’t acting on your claim, you can suffer economic, opportunity, and other types of loss.
• Offering Less than the Claim is Worth: Let’s suppose a hail storm destroys the roof and siding on your house. The contractor says it will be $22,000 to fix everything, but then your insurance offers you $7,000. This amount is not nearly enough to cover your loss.
• Denying a Claim without Reason: If your claim is denied, you need to know why. If the insurance company won’t tell you why they’re denying the claim, they are not acting in good faith. Not Responding to Time Limit Demands ? Until your claim is settled, you may be obligated to pay all the bills that are incurred. Medical facilities and other contractors involved in assessing and assisting with the loss will file liens against you personally. Unpaid obligations can damage your credit and even force you into bankruptcy. Putting a time limit on the insurance company forces them to decide to pay or contest the claim. If they simply choose to ignore the claim, they are acting in bad faith.

There are several other ways an insurance company can end up in violation of the Montana UTPA or the common law duties of good faith and fair dealing. If the insurance company is denying your claim, or they are ignoring you and not deciding, or they are offering a settlement that is less than the fair and reasonable value of your claim, the company may be acting in bad faith and violating your rights. If these things are happening to you, call Tourtlotte Law Firm in Billings at 406-294-3400.