A Bad Faith cause of action is appropriate when a disability insurance company breaches its duty to act in good faith toward its insured when administering and settling a claim. Your disability insurance policy is a contract that requires your insurance company to act in “good faith” toward you while addressing your claim. Situations giving rise to a Bad Faith cause of action can vary greatly. It can be established by assessing the company’s conduct solely on your claim or by documenting its pattern and practices. A disability insurance company can violate its duty to you and act in bad faith in several ways, including:
- Failing to reasonably investigate a claim.
- Withholding disability insurance benefits without a reasonable basis.
- Delaying the payment of a valid claim for an unreasonable length of time.
- Denying valid claims.
- Underpaying the disability insurance benefit.
- Requiring unreasonable Proof of Loss during the claims process.
- Unjustifiably terminating coverage under the policy after a claim has been made.
- Unfairly settling claims for less than fair value.
Our legal team thoroughly evaluates every claim to ensure the disability insurance company complied with its duty to act in good faith. Even if an insurance company is paying a claim, or agrees to reinstate a claimant’s benefits, a claim for Bad Faith may still be appropriate. A successful bad faith claim provides for damages beyond the reinstatement of your benefit. The damages are punitive in nature and meant to punish the disability insurance company for its wrongful conduct. The law and scope of damages for a Bad Faith claim vary by state, but are litigated in either state or federal court.
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