Reclaiming Your Life after a Devastating Accident

What to Do If You Suspect the Insurance Company Is Negotiating in Bad Faith

by Stacy Dean

Insurance companies must negotiate with policy holders in good faith, meaning they should follow through on their promise to cover vehicle accidents as required in the insurance policies and only use ethical means to resolve disputes and arrive at settlement agreements. If you suspect your insurance adjuster is doing things to sabotage your ability to obtain compensation for your damages and losses, here's what you need to do to handle the problem.

Identify the Issue

It can be challenging determining whether the insurance company's actions amount to bad faith negotiations, since negotiations can involve tactics you may not agree with (e.g. low-ball offers). Additionally, an insurance company's obligation to you differs depending on whose provider you're dealing with.

A third-party insurance company has a duty to handle your case in good faith, but that duty is less than what's required of your provider. The courts will only consider a third-party insurance company to have acted in bad faith if the company committed fraud, lied, or sabotaged your claim in some way (e.g. tampered with witnesses).

Your insurance provider, however, is held to a higher standard. It must make an effort to provide the benefits you're paying for, namely pay for your damages and losses according to your policy terms. You may have a claim of bad faith if the company does anything to get in the way of that, including but not limited to:

  • Giving low-ball offers without providing an explanation why
  • Refusing to communicate with you
  • Ignoring evidence that benefits your case
  • Lying about your policy benefits
  • Making unauthorized changes to your policy

Note the behaviors you think qualify as bad faith and gather the evidence (e.g. phone calls, letters) necessary to prove your point.

Write a Letter

Sometimes bringing up the issue of bad faith dealings will cause the insurance adjuster to start behaving more ethically because you can sue the company for this issue. The last thing the insurance company wants is to pay any more money than it has to on your case. Therefore, sending a letter noting the problematic behaviors, providing copies of proof, and demanding resolution can go a long way towards resolving the issue.

Be certain you actually use the phrase "Bad Faith" in your letter, as this will garner immediate attention. Include a deadline for the company to respond to you or fix the issue, and send the letter to the insurance adjuster, his or her supervisor, and the company's legal department. This ensures the adjuster doesn't just sweep the complaint under the rug.

Go to Court

If the adjuster continues to behave in an unethical manner, the next step is to sue for damages. Sometimes just filing the lawsuit is enough to get the right attention. However, you may have to see it through to completion, so it's best to work with an attorney to develop a viable strategy for winning the case.

For more information about this issue, contact a personal injury attorney at companies like the Gartner Law Firm.