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Insurance Bad Faith in the Midst of the Pandemic

A rejected insurance claim form.

The COVID-19 pandemic was, and continues to be, a public-health crisis unlike any other in recent history both in terms of the quickness with which it spread and the number of people affected. Since the beginning of the pandemic, nearly 30 million U.S. citizens—or just under 10% of the population—contracted the virus, and over 600,000 have died.

Almost all types of businesses took a major hit during the pandemic, and insurance companies are at the top of the list. Insurance companies rake in the money hand-over-fist during the good times. They collect premiums from all policyholders and receive claims from only a very small percentage.

However, for a variety of reasons, insurance companies saw an enormous spike in the number of claims filed during the pandemic. This put significant stress on these companies’ bottom lines. The question becomes, “Will insurance companies try to recoup these losses elsewhere?” Perhaps by denying coverage in response to a valid claim? Will there be a surge of insurance bad faith issues during COVID-19 pandemic? While insurance companies do not have to approve every claim, they must approve those that fall within the coverage outlined in the policy. When an insurance company refuses a claim without a valid reason, it may constitute insurance bad faith.

What Can I Do If the Insurance Company Denies My Claim?

An insurance policy is a contract between the insurance company and the insured. Under the terms of the contract, the insured agrees to pay a certain amount of money (the premium) in exchange for the insurance company’s agreement to compensate the insured for covered losses. The text of the insurance policy provides the details of the coverage, such as which types of claims are covered and the policy maximum.

If you decide to stop paying your insurance premiums, you are not fulfilling your end of the bargain. Thus, the insurance company will cancel your policy. However, what is your remedy if the insurance company refuses to approve a claim? At this point, you have already paid your premium, suffered a loss, and are looking to the insurance company for compensation. If the company refuses, you may think that you are out of luck. However, that is not the case. You can bring an insurance bad faith claim against the company.

What Is an Insurance Bad Faith Claim?

A bad faith claim involves an insurance company’s breach of the duty of “good faith and fair dealing” implied in every insurance contract. Even if the terms of an insurance policy do notcontain these words, courts read them into a policy based on public policy considerations. In other words, courts require insurance companies to act in good faith when investigating claims and making settlement offers. If an insurance company violates this duty, it is on the hook for damages.

Of course, insurance companies do not have to approve every claim they receive. And if an insurance company denies a claim, it doesn’t necessarily mean that it was acting in bad faith. For example, imagine you get into a car accident and seek compensation under your personal injury protection (PIP) policy or uninsured/underinsured motorist insurance. The insurance company may argue that you shared responsibility for the collision or ask for verification of medical treatment. If there is a reasonable basis for the company’s position, the insurance company is not acting in bad faith.

On the other hand, if the insurance company sits on your claim for a long period of time without contacting you or denies your claim without explanation, it may constitute bad faith.

When Can I Pursue a Bad Faith Claim Against an Insurance Company?

The following are common examples of insurance bad faith claims:

  • The insurance company offers less compensation than what is available under your policy;
  • The insurance company denies coverage without giving you a reasonable explanation;
  • The insurance company does not promptly investigate your claim;
  • The insurance company makes unreasonable demands of proof;
  • The insurance company tries to coerce you into settling the claim;
  • The insurance company misrepresents the terms or extent of the available coverage; and
  • The insurance company unreasonably delays payment for a valid claim.

Determining whether an insurance company engaged in bad faith is not always a straightforward determination. Doing so requires an examination of your claim as well as the insurance company’s efforts in attempting to resolve it. The assistance of an experienced Oregon injury attorney can help you understand whether you have a bad faith claim and what you can do to pursue it.

Damages in an Oregon Bad Faith Insurance Claim

When an insurance company acts in bad faith, they are violating the terms of an insurance agreement. This is not only a contractual violation, but it is also a separate legal claim. This is important because in a typical breach-of-contract lawsuit, the damages you can obtain are limited to the value of the contract. However, in an insurance bad faith claim, additional damages are available. That said, the laws governing bad faith claims are very complex, and anyone who believes that their insurance company is trying to take advantage of them should reach out to an Oregon injury lawyer for help.

Contact a Dedicated Oregon Bad Faith Insurance Claim Attorney for Immediate Assistance

Many are suspecting that there may be a surge of insurance bad faith issues during COVID-19 pandemic. This may result in even more difficulties and delays than normal when trying to settle a claim. If you filed a claim with an insurance company and they are giving you the runaround, reach out to D’Amore Law Group today. Our lawyers have decades of experience dealing with some of the largest and most well-funded insurance companies in the country, and have been prepping for a surge of COVID-19 bad-faith issues. Do not waste any more time on the phone with an insurance company representative—give the D’Amore Law Group a call. You can also reach us through our online form. Calling is free, and we accept all cases on a contingency basis. This means you will not pay for our representation unless we can get you the compensation you deserve.

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