To people on the outside, insurance systems can sometimes seem like a pyramid scheme or outright scam. In reality, insurance is a heavily regulated industry with careful underwriting and in-depth policies that explicitly break down the coverage available to the individuals who purchase them.
Insurance companies have a legal obligation to fulfill their end of the contract by paying out on legitimate claims made by valid policyholders. Most companies will uphold their policies but will do their best to minimize how much they actually pay out. Unfortunately, even people with legitimate claims sometimes find themselves facing a claim denial by their insurance company.
Some of those people may have misunderstood the terms of their policy or what they actually have the right to claim. Others, however, could find a legitimate claim denied for no discernible reason. Those circumstances are known as bad faith claim denials, and individuals who experience them can take action against the company that denied their claim.
You have to know your coverage to know if a denial was legitimate
Depending on whether you need coverage from your vehicle, health, business or homeowners insurance, you may have a policy that is many pages long. It can be difficult to wade through all of that coverage information, which is why many people find themselves turning to an attorney for help. Alternatively, it also makes sense to check the documents yourself to see if you believe the policy extends coverage in your case.
If it seems like the terms of the policy should cover you and the claim the company recently denied, then it may make sense to speak with an attorney with experience in bad faith insurance claims. You can take legal action in Colorado to enforce your right to coverage and receive an appropriate amount of compensation when you file a claim.
Make sure you put an accurate price on your claim
If you need to take legal action against a company that denied a legitimate claim, you need to know what the total cost of your claim should be. Whether you negotiate a settlement or go to court, you likely will not have the option of seeking additional compensation in the future. This is why it is of the utmost importance that you accurately validate the price you place on your claim.
Considering potential future expenses related to the claim can help. Having a firm understanding of the financial impact of both your initial claim and its denial can make it easier for you to push for a fair outcome when your insurance company isn’t cooperating. Holding them financially accountable may be the only way to remind them that denying claims and bad faith can end up being a mistake for their bottom line.