The vast majority of individuals have an insurance policy to protect their assets, their health, and even their own lives. But what happens if your insurance company unexpectedly cancels your policy in bad faith? Luckily, you do not have to face the insurance company on your own—if your provider suddenly ceases your coverage, contact the South Dakota insurance bad faith attorneys at Turbak Law for assistance.
There is a broad range of available health insurance categories, each with varying terms and conditions depending on the specific policy. Having an established insurance coverage plan in place offers you peace of mind in your day-to-day life. It is comforting to know that you are protected from unforeseen scenarios that could cause you or your possessions irreparable damage. Unfortunately, that feeling of safety can vanish in an instant if your insurance company fails to abide by its contractual obligations and cancels your policy. Fortunately, you can hold your insurance provider accountable, and get the compensation you are legally entitled to.
Insurance Policies: A 2-Way Street
When you enter into a contact for an insurance policy, the coverage provider must act in good faith in all of their business-related interactions with you. As a policyholder, you have an obligation to pay your insurance company on a recurring basis over the course of your plan. Likewise, your insurer has a reciprocal responsibility to conduct its affairs in good faith, namely promptly and transparently processing any claims you submit.
Insurance providers are sophisticated and profit-driven—not exactly an ideal combination of qualities from a policyholder’s perspective. At times, it can be unclear whether your insurance company is fulfilling their duty of acting in good faith. If you experience some of the telltale signs of insurance bad faith, such as denial or delay of payment on your claims without a reasonable explanation, or use of harassing or intrusive approaches to investigate the validity of your claim, then you should seek the advice of a trusted South Dakota insurance bad faith attorney.
Bad-Faith Policy Cancellation
Another example of bad faith insurance behavior is canceling your policy without having a reasonable basis for doing so. Sometimes, after insurance companies realize that they will be responsible for payment under a policy, they attempt to cancel or rescind the policy. This goes far beyond denying a single claim—which can also be an example of bad faith conduct—and is something insurance companies should be held accountable for. By the time you’ve sustained a loss, you can not go back and buy better coverage, but if the insurance company is successful, you may be responsible for your own loss, and have to repay anything that you’ve been paid towards it.
The applicable laws vary by state, but generally speaking, following the issuance of an insurance policy, the provider cannot revoke coverage unless certain very specific conditions are met. In South Dakota, SDCL 58-33-61 establishes the parameters under which a provider can legally cancel an insurance plan. The statute specifies that after sixty days from the effective date of policy issuance a notice of cancellation may not be issued unless it is premised upon at least one of the following reasons:
- Nonpayment of premium;
- Discovery of fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy, or in presenting a claim under the policy;
- Discovery of acts or omissions on the part of the named insured which increases any hazard insured against;
- The occurrence of a change in the risk which substantially increases any hazard insured against after insurance coverage has been issued;
- A violation of any local fire, health, safety, building, or construction regulation or ordinance with respect to any insured property or the occupancy thereof which substantially increases any hazard insured against;
- A determination by the director of the Division of Insurance that the continuation of the policy would jeopardize a company’s solvency or would place the insurer in violation of the insurance laws of this state;
- Violation or breach by the insured of any policy terms or conditions; or
- Similar reasons that are approved by the director of the Division of Insurance.
Additionally, your insurance provider must provide a formal notice of the cancellation of insurance coverage via mail or delivery at least twenty days in advance of the effective cancellation date. The notice of cancellation must also be accompanied by a written explanation of the specific reasons the provider chose to cancel your policy.
Protecting Your Rights Against Bad Faith Insurance
If your insurance company cancels your policy without providing an adequate notice explaining the basis for their action, you may be able to obtain additional compensation that will be added to your original claim amount. The law provides a right of action on the basis of bad faith that enables you as the policyholder to hold your insurance company accountable for breaching their contractual obligations.
It is essential that you consult with a knowledgeable bad faith attorney in order to successfully file suit against your insurance provider. Not only is this a nuanced and complex area of the law, but the sheer size and wealth of resources available to major insurance companies also make it vital that you have a skilled lawyer on your side to achieve a favorable resolution to your case.
Contact a South Dakota Insurance Bad Faith Attorney Today
If your insurance company inexplicably and unfairly cancels your insurance policy, a competent and experienced lawyer can assist you in obtaining justice. The attorneys at Turbak Law pride themselves in offering the utmost quality when it comes to legal representation. We are committed to ensuring that insurance companies treat you fairly and equitably, as they are legally required to do. To learn more about how Turbak Law can help find a solution to your legal needs, contact us today at (866) 231-0914.