We buy insurance to protect ourselves against financial risks. These include risk of death (life insurance), risk of disability preventing continued employment (disability insurance), risk of facing major medical expenses due to unforeseen injury or illness (health insurance), risk of damage or loss to your home and its contents arising out of theft, fire and weather damage (homeowner’s insurance), risks facing small and large businesses from financial losses (commercial insurance), risks from car accidents (automobile insurance), or risks from professional pursuits or as a director or officer of a corporation. We pay insurance premiums and expect our insurance company will pay for our losses. Hopefully, we will not need the coverage. But, what happens if we need coverage and the insurance company does not pay a valid claim?
Your insurance company has an obligation to treat you fairly and in good faith when a claim is submitted for payment. They must act reasonably and promptly in the investigation, processing and payment of valid claims. A liability insurer owes its insured customer the obligation to give equal consideration to its customer’s financial interests as it would its own interests.
When an insurance company acts unreasonably toward its own customer, it may have acted in bad faith and may be held accountable for the harm it caused to its customer. The duty of reasonable conduct applies to ALL types of insurance companies, including:
- Life Insurance
- Health and Disability Insurance
- Property and Casualty Insurance
- Automobile Insurance (including liability, uninsured and underinsured motorist coverage)
- Homeowner’s Insurance
- Commercial General Liability Insurance
- Director and Officer Liability Insurance
- Errors and Omissions Insurance
- Travel Insurance
We represent victims of unreasonable insurance practices. We seek accountability if an insurance company unreasonably causes economic and sometimes physical harm to its customer by failing to honor the commitment it made when it accepted its customer’s insurance premium.
Laura, only twelve years of age, was diagnosed with a malignant, inoperable tumor at the base of her brain stem. Fortunately, her parents purchased a family health insurance policy several years earlier. When she was first diagnosed with the cancerous tumor, her insurance company paid for her ongoing medication regime, but after a year, refused to pay for treatment any further, claiming that such treatment was “experimental.” Laura’s treating oncologist believed that the medication was essential to treat Laura’s tumor. Laura’s father, an elementary school teacher, raised money through community-based fundraisers (like car washes), but could not come up with the $8,000 per month cost of the medication. Laura’s parents retained our firm to assist. Today, that insurance company continues to pay for Laura’s monthly medication costs.
Scott, age 58, worked for a construction company for many years and earned a healthy salary. While driving to a job site, he was struck head-on by another motorist, suffering severe aggravation to his pre-existing spinal injury. Scott was later terminated from his employment because of his injuries, and due to his injuries, was now able to earn only a fraction of what he earned before the collision. The responsible driver was grossly underinsured. Scott submitted an underinsured motorist claim to his own insurance company, who refused to pay his claim. In the meantime, Scott was forced to apply for food stamps and search for work in a down economy, while the insurance company continued to deny the claim. Scott’s case resolved on confidential terms.
Stacy, a resident of Bullhead City, Arizona, and her husband Dan purchased a life insurance policy insuring Dan and naming Stacy as the policy’s beneficiary. Stacy and Dan wanted only that the policy provide enough funds to pay off their mortgage in the unlikely event that Dan died. Almost two years later, Stacy came home and discovered her husband unconscious in the bedroom. He had died several hours earlier. When Stacy submitted a claim for the policy’s death benefit, the life insurance company began an investigation, and later determined that Stacy and Dan should have disclosed more on their application for insurance. The life insurance company denied payment of the death benefit. Stacy’s case resolved on confidential terms.
John purchased a health insurance policy for his family. After timely paying premiums for many months, John developed a heart condition. When his medical care providers submitted claims for payment, John’s health insurance company conducted a coverage investigation and sent John a letter stating that he should have more fully disclosed certain conditions on his application for insurance, even though the insurance company had been accepting John’s premium payments since the policy was first issued. The health insurance company not only denied coverage, but it rescinded the policy that it issued to John and his family, leaving John, his wife and his infant child without any insurance coverage whatsoever. John’s case resolved on confidential terms.