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Five Things Your Insurance Provider May Not Want You To Know

Those who have been denied an insurance claim are likely to feel helpless when facing the vast resources and the presumably extensive legal experience of their insurance providers.

Policy holders preparing to pursue an insurance bad faith lawsuit may fear that their case against their insurance company is a long shot. However, many laws and legal standards are in place to protect the interests of the consumer in an insurance policy agreement. 

The following five factors should give plaintiffs increased confidence in their chances of winning an insurance bad faith claim:

Uberrima fides

Uberrima fides—meaning "utmost good faith"—is a legal doctrine governing the conduct of insurance providers in insurance contracts. It means that insurance companies must act with the utmost good faith in interpreting policies and in investigating and making payments to cover claims.

Any violation of uberrima fides by an insurance company subjects that company to legal action compensating the policy holder.

Misrepresentations of coverage

Insurance companies cannot take advantage of policy holders by having an agent convince the policy holder to sign on to a policy under false pretexts.

Anything said by an insurance agent when the policy is being sold should be honored later in the event of a claim. If you feel that an insurance company's sales agent misrepresented a policy, you may have a strong case against that insurance company. 

Insufficient coverage

Insurance agents often recommend a certain amount of coverage to a new client. Sometimes, insurance agents will recommend an insufficient amount of coverage just to make premiums attractively low for new clients that they are trying to sign on to a policy. 

If an agent has recommended a coverage amount to you that turned out to be less than you needed, you may be eligible for compensation for the full amount of your losses instead of just the policy limit. 

Policy ambiguity

Insurance policies are usually long, drawn-out documents that are obvious attempts by the insurance policy to leave out an possible ambiguity. However, ambiguity that does exist in a policy is generally interpreted in a legal context to favor the policy holder's interests.

Limitations and exclusions

An insurance company must clearly explain any limitations and exclusions on the policy in clear, concise language. Also, limitations and exclusions must be conspicuously listed in a policy.

It is not the responsibility of the policy holder to prove his or her right to a claim. Rather, it is the insurance provider's responsibility to prove that a limitation or exclusion is applicable and clears the insurance company of the responsibility for covering the claim. Talk to a professional like Edward J. Achrem & Associates, Ltd. for more information.