If an insurance company does not respond to a claim in a timely manner, and their delayed response causes further damage of some sort in the situation at hand, the company may be guilty of bad faith, depending on the circumstances of the situation and the contract. If so, you may be able to file suit.
Consider the following scenario: you have a homeowner’s policy with an insurance company. The policy states specifically that it covers mold in the home. It may cover the removal of the mold, or preventative measures to avoid further damage to the home and/or illness to the home’s inhabitants. Whatever the specific coverage may be, the policy states that the insurance company will step in when a mold situation arises.
Now let’s say the mold situation does arise, and it’s deadly mold. You contact your insurance company immediately: battling the mold needs to start quickly, and it’s not a cheap job. Your insurance company, however, delays responding to you, causing the mold to spread further in your home.
Bad faith is a legal term that essentially means that the company is not operating in the best interests of the customer. Bad faith is a form of insurance fraud, although it can apply to other types of businesses as well. Wrongful denials and delayed payments are just a few examples of conduct that can constitute bad faith. The intent behind the actions is the key to winning a bad faith claim.
In order to claim bad faith, you must prove with reasonable evidence that the insurance company did not honor their contract with you in how they acted, and that they did not attempt to act in your best interests, or in a way that was fair to you as per the terms of your agreement.
If you believe your insurance company acted in bad faith, you should strongly consider speaking with a lawyer. S/he can help you assess the situation and determine if you have a valid cause of action.