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Variety of ways an insurer can act in bad faith

When someone files a claim to their insurance company, they expect it to be covered. It's the whole reason why people have insurance. They want to feel secure that when something unexpected happens, they are financially covered and supported. When their claims are denied, it can affect a person (and their family or loved ones) financially and emotionally. This is made even worse if the insurance company denies the claim on illegal, or bad faith, grounds.

What are some of the common tactics that insurance companies use to deny a claim in this manner? Here are three:

  • The first is misrepresentation. This is where an insurance company simply misstates (on purpose) the intent of the policy or lies about the content of the policy. Misrepresentation is a very common tactic for insurers that act in bad faith.
  • Another common tactic is breach of contract. Along the same lines as "lying," breach of contract entails, well, an insurer breaching the contract that they and their client signed.
  • Along the same lines as breach of contract is breach of fiduciary duty. Fiduciary duty is one party's legal obligation to act in the best interests of another. With insurance, a company has a fiduciary duty owed to their clients. When they breach this fiduciary duty, they can be held liable with a bad faith insurance lawsuit.

Every case is going to be a little different, and the circumstances and details will vary. For anyone dealing with a shady insurance company that is acting in bad faith, you should contact an attorney immediately.

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