10 Commandments for Insurance Companies
Many residents of the Gulf Coast have personally experienced a hurricane or tropical storm and its aftermath. We want to remind you of the rights you have under insurance policies purchased to protect your home and family. This type of insurance policy is referred to as first-party insurance, meaning the insurer protects the insured individual (the homeowner). Insurance companies provide a crucial, costly service. Few people “casually” need the help of their insurers—in most cases, needing an insurance company means you need help quickly due to an unexpected event such as a natural disaster. Therefore, it is important to know what your rights are when dealing with your insurer.
While laws vary state to state, we have compiled a general list of the 10 Commandments for an Insurer:
- Insurers must conduct a reasonable (i.e., full and comprehensive) investigation.
- Insurers must conduct a prompt investigation (usually within two weeks or so).
- Insurers must provide a fair settlement in good faith when coverage is “reasonably clear.”
- Insurers must not deny a claim because other coverage is available or a third party is responsible.
- Insurers must not misrepresent the policy terms or available benefits to the client.
- Insurers must not seek to close a claim when only a partial payment is made.
- Insurers must provide a reasonable explanation for claim denial or compromise offer.
- Insurers must not deny claims in bad faith.
- Insurers must act in good faith with claimants (or risk attorneys’ fees in every state other than Mississippi).
- Insurers must pay claims when coverage is reasonably clear.
Insurance Company Conduct FAQ
Why do insurers have an obligation to act in good faith?
Insurance companies have a legal obligation to act in good faith. They accept premium payments with the understanding that these should cover the policyholder’s losses in the event of a natural disaster, accident, or other covered emergency. Insurance policies are complicated but should not be written in such a way as to confuse policyholders or offer insurers loopholes to avoid paying valid claims. If an insurer is violating the 10 Commandments we’ve listed here, they may be acting in bad faith. You could have grounds for legal action—to pursue the fair value of your claim, plus damages.
What are some signs that the insurer is violating my trust?
The insurance carrier may be acting in violation of good faith practices if you’re experiencing unnecessary or unexplained delays, you’ve been offered a very low settlement, or if your claim was denied outright with no reasonable explanation. Insurance companies are for-profit organizations, but this does not mean they have the right to underpay or deny valid claims. If you were paying your premiums and believe that your losses should be covered, the insurer may be violating one or more of the 10 Commandments for an Insurer.
What arm my rights if my insurer violated these 10 commandments?
If the insurance company violated one or more of the 10 Commandments for an Insurer that we’ve listed here, you may have grounds for a lawsuit against them. This lawsuit would allege a failure to act in good faith in handling your claim and would allow you to pursue the full and fair value of your claim. You may also be entitled to money for legal fees and any other losses you’ve experienced as a result of the insurer’s treatment. Punitive damages, meant to punish and make an example of the insurance company, may also be awarded.
Call (888) 493-1629 for an Experienced Insurance Claim Lawyer
If an insurance company does not comply with these rules, this is referred to as bad faith insurance practices.
Some examples of an insurance company acting in bad faith include:
- Delaying or denying compensation without a justifiable reason
- Failing to acknowledge and reply to a claim promptly
- Failing to perform a proper and thorough investigation into the claim
- Attempting to settle a claim for a less than reasonable amount
- Failing to inform the insured of an appeals process
- Failing to provide a reasonable explanation for a denied or underpaid claim
- Requiring unnecessarily burdensome documentation to process a claim
- Using harassing investigative methods to intimidate the claimant
At Arnold & Itkin, we have represented victims of hurricanes, tropical storms, wildfires, and other natural disasters since 2004. When it comes to filing an insurance claim and successfully obtaining the monies owed to you, there is no better team to trust than ours. We are qualified to handle matters of insurance claim disputes in all 50 states, and we are available seven days a week for you. You can rely on our firm when disaster hits.
If you believe that your insurance company is not obeying any of these 10 commandments, contact the insurance claim attorneys at Arnold & Itkin at (888) 493-1629. We offer completely free, confidential consultations.
