Taking on the intricate world of insurance claims can feel overwhelming, especially when facing the possibility of bad faith practices by insurers. That is why it’s so important for individuals in South Dakota to know what a bad faith claim really means and how to effectively prove it. This understanding can not only help protect your rights but also ensures you receive the fair treatment you deserve from your insurance providers.
What Is Bad Faith?
A bad faith claim occurs when an insurance company does not adhere to the terms specified in its policies and acts unfairly or misleadingly toward the policyholder.
This scenario typically occurs when the insurer’s actions negatively affect your initial claim for benefits, leading to unfair delays, unwarranted denials, or other tactics that undermine your entitled coverage.
However, regardless of the type of insurance you hold—whether it be health, life, auto, or homeowners insurance—experiencing bad faith practices can have significant repercussions.
Establishing a Bad Faith Claim
South Dakota law classifies bad faith as an intentional tort, which indicates that an insurance provider must intentionally engage in wrongful conduct while processing claims or disbursing policy benefits. Consequently, to establish a bad faith claim, the insured must demonstrate two critical elements:
Lack of Reasonable Basis
The insured must show that there is no reasonable basis for the insurer’s denial of policy benefits or failure to uphold its contractual obligations. This implies that the insurer did not have a legitimate reason, grounded in the policy terms or applicable law, to deny the claim.
Insurer’s Awareness or Reckless Disregard
The insured must also prove that the insurer had knowledge or showed reckless disregard for the absence of a reasonable basis for the denial of benefits. This means that the insurer not only ignored the valid claim but was also aware of the denial’s unjustified nature, or they acted without caring about the consequences of their actions.
The Evidence Needed To Prove Bad Faith
To successfully prove insurance bad faith, it’s crucial to collect substantial and detailed evidence. Here are some steps to assist you in gathering the necessary documentation:
Maintain Thorough Records
Keep records of all communications with the insurance company. This includes every email, letter, and phone conversation. For each interaction, note the date, time, participants, and key points discussed. This documentation is an important resource for illustrating the insurer’s unreasonable behavior, failure to act, or inadequate responses throughout the claims process.
Request a Copy of Your Insurance Policy
Obtain a complete and up-to-date copy of your insurance policy. Carefully review its terms and conditions, paying close attention to coverage limits, exclusions, and responsibilities of both the insurer and insured. Identify specific clauses that directly support your claim and any unclear language the insurer may be misinterpreting or exploiting to deny claims.
Document the Insurer’s Actions
If you experience delays in the claims process, document each instance, including the date of the request and the reasons given by the insurer for the delay. If your claim is denied, ask for a formal written explanation outlining the rationale behind the denial. In addition, collect any supporting evidence, such as photographs, witness statements, or repair estimates, that can counter the insurer’s claims and highlight inconsistencies.
Contact Abourezk Law Today To Learn More About Bad Faith Claims
If you are concerned that your insurance company is not keeping its promises, or if you would like to explore the legal options available due to bad faith tactics employed by an insurer, contact Abourezk Law. Our skilled legal team can assess your case, evaluate your options, and identify ways to protect your interests