Bad faith insurance practices occur when a company knowingly and intentionally denies payment of a legitimate claim by using several different tactics. These tactics include failure to investigate claims promptly and thoroughly, delaying and underpaying claims, misinterpreting policy language, and failing to communicate honestly with the insurer regarding claims. A key word in bad faith practices is “unreasonable”.
Unfortunately, many companies will continue to practice bad faith in hopes the insured will just “go away” and drop the claims. In the last five years, I have had to file four insurance claims for hurricane damage to my home, an automobile accident with injury, an on the job injury with federal worker’s compensation, and with a credit disability insurance company. Each company did everything possible to refuse or underpay my claims.
During Florida’s hurricane outbreak in 2004, a pecan tree fell into the kitchen of my mobile home causing severe roofing, electrical, and flooring damage. The insurance company responded within three days and encouraged me to submit repair estimates. Unfortunately, thousands of Florida homes were damaged but the most damage occurred in the Panhandle areas. While construction workers with most of the available repair supplies flocked to the Panhandle, we were forced to live under blue roofing tarp.
Many Florida homes suffered further damage while awaiting delivery of repair supplies to our state. Subsequently, the mobile home suffered mold and flooring damage. The insurance company issued a check to purposively begin repair but, unknowing to me, it was a settlement offer and once cashed, it was my agreement to settle the claim.
Many insurance companies will not inform an insured that the check is an actual settlement, so when I called them back because of mold, my claim was summarily denied. The home is beyond repair and I was forced into homelessness, for which I have not recovered. I was unsuccessful with attempts to recover for the mold damage and the insurance company got away with paying only $6000 for a seven-year-old mobile home set for demolition.
I thought when I sustained an on the job injury, in 2005, while working for the Federal Government, the claim would be handled in a fair, prompt and timely manner. I was wrong. The insurance industry has practiced bad faith tactics for years, mainly because they lack Federal oversight and most settlements are quieted and not reported. However, what happens if the culprits are the Federal Government? Who oversees them when they break insurance laws and practice bad faith insurance tactics? I will talk more on this case later.
When obtaining a credit loan, it is always a good idea to purchase credit and disability insurance. That is advice I continue to offer despite my ordeal of bad faith practices by the insurance company. When I was unable to make car and loan payments due to the job injury, I filed a claim with my credit and disability insurance company. The company’s practices fit the definition of bad faith tactics to the letter. From 2006 to late 2008, their delaying payments on my car and loan caused a major blemish on my credit report that I will never recover from. The credit union went so far as to repossess my car knowing the insurance company tactics were unfair and in bad faith.
During the two-year claim process, the adjuster sent a letter almost every other week asking for the same information and records. The “needed more information” letters even denied my chiropractor’s records claiming he is not qualified as a physician by definition under the Certificate of Insurance. When asked for a copy of the Certificate, it was never received. Under their own policy language, a chiropractor is qualified to provide a disability rating but the adjuster continued to misinterpret the definitions. At one point, I was sent for a second opinion with a chiropractor who agreed to the disability in the body of his note but refused to commit to his findings in his summary.
Finally, I composed a letter, to a person other than the adjuster of the bad faith insurance company, claiming unfair practices. I explained how I was denied benefits five days after the fax date their independent chiropractor’s records were received. It seemed suspicious because there was never a more timely response. I requested a complete copy of my files; I wanted to see what information was used to deny my claim five months after I received a letter stating, “Our records indicate you may still be disabled”. Soon afterwards, the claim was paid. My request for a copy of my records was never honored.
In 2006, I was involved in a car accident, which caused a herniated disc and chronic back pain. The person at-fault insurance company flat out refused to pay the claim. Luckily, I had no fault and uninsured motorist insurance, which eventually paid the claim. The claim to prove my injury loss lasted 8 months because, even though I was under the care of an orthopedic physician for another injury, they would not believe the back injury was new.
Because of bad faith tactics of prolonging the claim process, I had to settle for less, even though I have to live with chronic pain. I was financially ruined and needed a place to stay; I had become indigent. This is what most bad faith insurance companies’ hope for, that I have no other choice but to settle or go away.
My last bad faith insurance claim is with the Federal Government Department of Labor. There is no higher authority to fight this case. I filed worker’s compensation in 2005 and have yet to receive it. The case went back and forth for reconsideration because the doctor did not word his responses based on the language used by the department. It is a semantic case.
Now that my injury was accepted in February 2009, the claims adjuster “does not have time” to process a formal decision regarding back compensation. His bad faith insurance tactics is to deny and delay a formal decision so I cannot appeal and have a different person look at my claim. He has unreasonably requested 15 years of medical records while ignoring a synopsis from my board certified treating physician. This is an ongoing case; I will wait to write the conclusion. They are immune from bad faith lawsuits. Stay tuned.
Bad faith insurance practices are more prevalent than anyone would think. It wears you down, especially when you are already ill. It takes diligence and persistence. Still, many companies lack incentive to discontinue the illegal practice of bad faith, despite any proposed oversight. Insurance companies rule the industry.