Insurance companies have a legal duty to act in good faith with their policyholders. This means that you pay the premiums, and you should get the benefits if something is to happen without getting the runaround. Of course, not all insurance companies are bad. But some take advantage of their policyholders and unreasonably delay, discount, or deny their policyholders’ claims for compensation.
When an insurance company unreasonably delays, depreciates, or denies a policy holder’s claim, that is called “insurance bad faith,” “breach of insurer’s duty of good faith,” or simply “unfair trade practices.” Insurance bad faith could be as simple as your insurance company refusing to contact you or promptly investigate your claim.
Some signs that your insurance company may be committing bad faith: