Many insurance companies deny claims, yet you dutifully met your end of the deal. In the event of loss, you are required to provide the necessary documentation to prove the legitimacy of your loss. On the other hand, your insurer is expected to conduct a full investigation of the claim promptly, then make a reasonable settlement.

Unfortunately, some insurance companies will resort to all manner of tricks to deny a legitimate claim. This is called insurance bad faith, and it can make you question whether or not your premium is worth the effort. Even big insurance companies have been known to deliberately deny claims, or frustrate you until you give up, all to boost their profits.

Use this article to learn how to file a claim the right way and how a lawyer can help.

Why do insurance companies deny claims?

Not all claims result in compensation. When buying an insurance policy, the contract outlines what constitutes a covered event. For instance, when buying homeowners insurance, the policy will include sections on the nature of coverage and a promise of indemnification. The policy will also include a section on what is not covered and the conditions to be met to keep the policy in place. Your role is to pay the premiums and promptly file a claim when the covered event results in a loss.

As an equal partner in the insurance contract, your insurance company has a legal duty to act in good faith by making prompt payments as soon as it conducts an investigation and determines the validity of the claim and the extent of the loss. The idea is to indemnify you for coverage you paid for. It is important to note that the insurance company can deny a claim if there is a reasonable basis for the denial. When this happens, the insurer is expected to provide you with the necessary documentation and an explanation of why the decision was reached.

When your insurance company attempts to deny a legitimate claim, attempts to pay you less than what you are owed, or delays the compensation process without adequate explanation, then the company may be acting in insurance bad faith. Denying claims that are supposed to be paid is illegal, and the law provides you with two options. You can either file a complaint with the South Dakota Division of Insurance, or file a lawsuit on the basis of insurance bad faith.

Filing a complaint with the South Dakota Division of Insurance (DOI)

Every state has a division of insurance to protect policyholders from the rogue actions of some insurance providers. In South Dakota, the Division of Insurance’ mission is to protect the public through the provision of quality assistance. You can find useful resources on its website regarding your rights as a policyholder.

Unfortunately, like many state and federal regulatory agencies, the South Dakota Division of Insurance has limited resources, which means that they may be of limited help in investigating the insurance company’s behavior and properly addressing the insurance company’s responsibilities. The DOI is responsible for insurance oversight, and if they deem and insurance company is acting unlawfully, they have the power to issue fines.  

It is important to note that the DOI will not represent you in a court of law and will be of limited help in getting you the money owed to you by the insurance company.  Many times, if you are being treated unfairly by your insurance company, you have to take matters into your own hands to see that you are treated fairly and receive the benefits owed to you under your contract with the insurance company. 

Filing a lawsuit against your insurance company

If you wish, you can file a lawsuit in instead of or in addition to filing a complaint at the DOI. Talk to your South Dakota insurance claim lawyer to determine if a lawsuit is the best course of action.

If you feel that you have been wrongfully denied homeowners insurance claim or any other legitimate claim by an insurance company you or someone you know purchased coverage from, talking to your lawyer will help you understand your legal rights and the insurance company’s obligations under the law. Your lawyer will examine the facts, and assist you in collecting all the documentation needed for pursuing legal action in a court of law.

A lawsuit is the only way that you can force an insurance company to pay you the money you are rightfully owed under the contract.  In most of the cases, the case will be settled pre-trial through negotiation and mediation efforts. If you are unable to reach an agreement and decide to go to trial, the case may take years before it is resolved. If you win, you can expect to recover what you are owed by the insurance company, plus attorney fees and other punitive damages.

For more information

If you feel that your insurance claim has been wrongly handled, filing a claim against your insurance company can be the way to go. For more information, contact, contact Turbak Law Office at (866) 305-2015 today, and let us help you get justice.