What Good Faith Means in Accident Claims
Insurance companies have certain legal duties to those who file insurance claims through them. However, that does not translate to an equal moral duty. Once you open a claim, the insurance company is bound to a tacit vow of reasonability and good faith, but what a “good faith” claim actually entails can be surprisingly vague.
What Good and Bad Faith Entail
Insurance companies have a duty to defend claimants and an obligation to act in good faith, which simply put, means they have to act in a reasonable manner and can’t bar you unjustly from receiving a claim. The exact definition of this can vary from state to state, but in general, there are a few things insurance companies are expected to do:
- Adjust your claim within a reasonable timeframe.
- Communicate with claimants openly by responding to calls and letters.
- If your claim is denied, clearly outline the exact reasons it was declined with references to specific contract provisions.
- Make a reasonable attempt to find reasons to approve and pay your claim, rather than to find reasons to deny it.
Conversely, a bad faith claim refers to any time where an insurance adjuster inappropriately denies a claim for an unreasonable cause. Failing to communicate important information to clients, being unreasonably slow, offering excessively low settlement amounts, harassing claimants, and generally refusing to investigate or pay claims for improper reasons all constitute bad faith. Note that bad faith only occurs when things leave the realm of debatability; even if a situation is mostly and reasonably in your favor, as long as there’s room for fair debate or doubt that could justify an insurance adjuster’s decision, it’s not illegal.
Legal, Yet Dishonest Insurance Tactics
Acting in good faith doesn’t mean an insurance company has to be completely moral; ultimately, insurance companies are private, for-profit organizations that prioritize their bottom line. Most insurance adjusters are trained to find ways to doubt and devalue your claim. The methods they use oftentimes don’t constitute bad faith, and as such, are completely legal despite how they might harm an insured claimant.
- Many adjusters will assure you they’re on your side, using trust and friendliness to get you to make poor decisions or agree to smaller claims than normal.
- If an insurance company offers a quick, easy sum and tries to get you to settle quickly, it’s likely a trap. Accepting a settlement bars you from pursuing additional compensation, and you might have injuries you don’t yet know about.
- Adjusters usually try to get you to sign formal statements or give them testimonies and accounts of what happened—even if these might seem harmless, they’ll be used against you if possible. Only give the bare minimum of information required to open a claim.
- Lawyers are wise to dishonest insurance tactics, and adjusters know that. They’ll assure you that you don’t need to speak to a lawyer. Ignore them; talking to an attorney levels the playing field and is always advisable.
Handling Dishonest Accident Insurance Companies in Arizona
Many insurance adjusters do act in the best interest of claimants, offering proper settlement amounts for simple collisions—however, without an experienced auto accident attorney on your side, it’s difficult to distinguish these honest adjusters from those who use dishonest tactics or make bad faith claims. Even if you feel you don’t need an attorney, contact us at (623) 877-3600 to schedule a free consultation.
