Bad Faith In Denying An Insurance Claim
Life insurance policies are contracts between the insurance company and the insured person. Therefore, when the insured person dies, his beneficiaries are often left trying to collect the money promised under the policy from an insurance company that may be looking for technicalities in the contract to deny the claim. In some cases, the insurance company is able to deny a claim because of information provided by the insured when he filled out paperwork for the policy. In other cases, the insurance company acts in bad faith in denying the claim.
There are few things that can get an insurance claim denied faster than a misrepresentation by the insured. This is especially if the misrepresentation is determined to be a material misrepresentation. Even when an insured person provides incorrect information accidentally, or information that he believes to be true at the time but turns out to be wrong, the insurance company can deny the claim.
Insurance companies can consider misrepresented or omitted information, even when it does not relate to the cause of death of the insured. For example, in one case, a woman sued an insurance company for denying a claim because her husband had listed his height incorrectly. It is very important for a person filling out insurance forms to fill them out correctly and truthfully, and when in doubt confirm the information before submitting the forms.
Insurance companies are supposed to act in good faith in denying a claim. This generally requires the insurance company not to deny an otherwise valid claim based on questionable investigations or information.
In some cases, the insurance company’s basis for denying a claim based on what it deems to be material misrepresentations may be no more than an attempt to discourage the beneficiaries from further pursuing a claim. The company essentially hopes that in denying the claim, the beneficiary will give up or not pursue the claim any further or even sue the company. In this way, a company may be said to be denying the claim in bad faith.
When an insurance company denies a claim in bad faith, the beneficiary can go beyond suing the company to receive the amount guaranteed by the policy. Under Pennsylvania law, the beneficiary can also seek damages, interest on the unpaid claim, and the payment of attorney’s’ fees from the insurance company after proving the denial was in bad faith.
Determining what is a bad faith denial is not always easy. In some cases, even when it seems that the insurance company is acting in bad faith in denying a claim, the company’s actions may not meet the legal definition for bad faith conduct. It is therefore important to seek advice from an experienced attorney once an insurance company denies your claim for payment.
Call To Schedule an Appointment with an Experienced Attorney
If you filed a life insurance claim after the death of a loved one, and the claim was denied, you need to consult with an experienced lawyer on how to fight the denial. Contact our Philadelphia life insurance denial lawyer at the law firm of Louis S. Schwartz, Attorneys at Law for more information.