Understanding Insurance and Bad Faith Tactics

If you have an insurance policy, you have to pay your insurance premiums each month. Having insurance is intended to put your mind at ease in the event of an accident. That is why people have a reasonable expectation that their insurance provider will compensate them.

Unfortunately, it is not uncommon for insurance companies to utilize bad faith tactics to protect their bottom line and avoid paying out valid claims. If you believe that an insurance company is acting in an unethical or inappropriate manner, speak with an insurance law attorney to determine if you have grounds to sue the insurer for its bad faith tactics.

At Arnett & Arnett, PC, our insurance bad faith attorneys in Chandler, Arizona, have the knowledge and experience to assist people who have been wronged by insurance companies. We also represent victims of bad faith tactics in Tucson, Phoenix, and throughout the entire state of Arizona.

Arizona’s Unfair Claim Settlement Practices Act

Arizona implemented the Unfair Claim Settlement Practices Act which establishes standards of conduct that insurance companies in the state must meet to act in “good faith.” If an insurance company’s conduct falls below the standard, the insurer can be held responsible for acting unreasonably.

In Arizona, those who think they were wronged by an insurance company have the burden to prove that the insurer acted in bad faith. In order to prove that an insurance company engaged in bad faith tactics, the insured must prove the following two elements:

  1. The insurer failed to act reasonably
  2. The company was aware of the unreasonableness of its conduct

Arizona’s Unfair Claim Settlement Practices Act can be helpful when determining whether or not an insurance company acted unreasonably to give legal grounds for a bad faith claim against the company. 

Common Types of Insurance Bad Faith Tactics

Broadly speaking, an insurance company is acting in bad faith when the company engages in conduct that is unreasonable and fails to uphold its end of a bargain when processing claims. Some of the most common types of insurance bad faith tactics include:

  • Denying claims without a justified reason. Insurance companies must give a reason for denying claims. In addition, the reason for denying a claim cannot be invalid or unjustified.
  • Not conducting a prompt or thorough investigation. Failure to properly or promptly investigate a claim can be one of the company’s bad faith tactics.
  • Making a lowball settlement offer. If the insurance company makes a lowball settlement offer in the hope that the claimant will accept it, the insurer may be acting in bad faith.
  • Delaying or denying requests for approval for medical care. Insurance companies must respond to requests for approval for medical care within a reasonable amount of time. Delaying or unreasonably denying such requests could be a bad faith tactic.
  • Refusing to pay valid claims. An insurance company’s refusal to pay a claim without a reasonable basis may be a breach of the insurer’s duty to act in good faith.
  • Misrepresenting the terms or language of the insurance policy. An insurance company may be acting in bad faith when it intentionally misrepresents the terms or language of the insurance policy to the policyholder in an attempt to avoid paying a valid claim.
  • Making threatening statements. One of the most extreme bad faith tactics is making threatening statements against policyholders for filing a claim or asserting their rights.

Seek Legal Counsel to Help You

If you believe that an insurance company is engaging in bad faith tactics, our knowledgeable attorneys at Arnett & Arnett, PC, can help you understand your legal options, hold the insurer responsible for its unreasonable conduct, and work diligently to pursue appropriate compensation on your behalf. We have protected policyholders in Chandler, Arizona, and throughout the state for decades. Schedule a case review with our attorney to get the legal counsel you need.


Recent Posts