Insurance is a contract between two parties, each with responsibilities. As the insured, you are responsible for paying insurance premiums as agreed, while your insurer is responsible for honoring the terms of your policy when a legitimate claim is made. Unfortunately, this is not always what happens when you file a claim with an insurance company.

Some insurers will go out of their way to deny your claim or take too long to respond to a valid and reasonable claim. If you are having a hard time getting your insurer to pay for your claim, here are some steps you can take to fight back.

Why do insurance companies deny claims?

Paying premiums does not guarantee compensation when the unexpected happens. Even if you hold up your end of the deal by making all the required payments, there are still valid reasons why an insurer might deny your claim.  Denial of a claim may happen if you wait too long before making a claim, or if the claim falls outside the scope of coverage provided by your insurance policy. Being familiar with your insurance policy, and knowing both your rights and your obligations under the policy, can help you avoid making mistakes that will negatively affect your claim.

Just because an insurer denies a claim, or makes a mistake while processing or investigating your claim, it does not necessarily mean that the insurer is acting in bad faith. Bad faith occurs when your insurer tries to evade its responsibilities to properly investigate a claim, to pay a legitimate claim, and to resolve a claim within a reasonable time period. There are many signs of insurance bad faith, and they may arise at any stage of the claims process. Misrepresenting the terms of your policy, denying a claim without providing a reasonable explanation, and failing to respond to a claim are all examples of bad faith.

What to do if the insurance company threatens not to pay your claim

Work with the insurance company

If you feel that you are being treated unfairly by an insurance company, you will probably find continued contact with them to be frustrating.  However, you may still be able to resolve your claim by working with them directly. Even if you can’t, continuing to communicate with them will provide you with important information that you can share with the state insurance regulator or an insurance bad faith attorney.  After filing your claim, follow up with the insurance company frequently, and thoroughly document all communications that you have. Be sure to note whom you speak to and when, and what you discuss each time. Lastly, communicate in writing, either through text, email, or letter.

Contact the state insurance regulator

Insurance is primarily regulated at the state level. In South Dakota, insurance regulation is the responsibility of the Division of Insurance, and it is the mission of the division to protect the public from insurance companies’ bad practices. If you cannot get your insurance company to respond to your claim, if they seem to be dragging out the process by continuously asking for additional information, or if your claim has been denied outright, it may be time to get the Division of Insurance involved. You can contact the division to ask questions or to discuss your situation; you can also file a formal complaint against the insurance company.  Although the Division of Insurance cannot offer you legal advice or legal services, they are an excellent resource for insurance questions and problems.

Consult a lawyer

Insurance companies are for-profit businesses, and it is in a company’s best interest to pay as few claims as possible.  A South Dakota insurance bad faith attorney, though, can help enforce your rights as a policyholder. You don’t need to wait until your claim has been denied to involve an attorney.  An attorney can review the terms of your insurance policy and help you determine if your claim should be covered; he or she can also help you determine what information you need to provide to properly document your claim.  An attorney will assist you with any complications that arise as part of the claims process and make sure your insurance company knows you have an experienced legal advocate on your side.

If you believe that the insurance company has not handled your claim in good faith, you can also file a lawsuit based on insurance bad faith.  If you successfully demonstrate that the insurance company acted in bad faith, you may be entitled to damages beyond the amount of your original claim as compensation for the insurance company’s actions.

For more information

Take action when your insurer threatens not to pay your claim. For more information, contact Turbak Law Office today at (866) 231-0914.