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When A Bad Faith Disability Claim Is Warranted


By Contributing Author

When you make a claim for disability, you make the presumption that your insurance carrier will follow through with their end of the bargain. If you paid the premium to cover the possibility that you become disabled, the insurance company should honor your claim if that happens. A bad faith disability claim can be made when your insurance company isn’t handling your claim fairly.

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Insurance companies have the obligation to operate under “good faith.” That means that they are required to properly investigate all disability claims, pay on them if they are found to be true, and not intentionally waste time investigating or paying the claim.


What are the elements of Bad Faith Insurance Claim denial?

For you to have a bad faith insurance claim, you have to prove that they unreasonably denied your claim. Even if the company does have a reasonable cause to deny your claim, you may be able to claim bad faith if they took an unreasonable amount of time to investigate. The specifics about what elements are required differ from state to state. Knowing what they are is important  to help you properly make a bad faith insurance claim.

In most states, someone who wants to make a bad faith claim for a personal injury leading to disability must prove that:

  • The insurance company acted unreasonably
  • The insurance company either had reckless disregard for the insured or that they knew they were reckless in the handling of the claim


These are not always easy things to prove.

The notion of “reasonable” is a highly subjective part of the law. There are often times when an insurance company has a backlog or their approval process may take a long time, but that doesn’t mean they were unreasonably acting on your claim. To prove they were unreasonable, you would have to have documented facts like they refused to return your call, lost paperwork, or some other way in which their negligence delayed your claim being handled.

There are also times when your disability claim will be denied because of exceptions in your policy or the general type of policy that you had. That would not mean your denial is in bad faith; that is a function of your policy and what the guidelines for approval stipulate. Therefore, if they deny your claim because it wasn’t under the parameters of your policy, you would not be eligible to make a bad faith claim.


Insurance carrier conduct that may be deemed bad faith:

  • Intentional misrepresentation of policy language or records to avoid paying for claim
  • Unreasonably conducting investigation during the litigation process
  • Not using standard protocol for denying claim
  • Unreasonable demands made for proof of disability
  • Coercive or abusive tactics made against the insured to force them to settle
  • Not following adequate investigation about the insured’s claim


What type of damages can you seek?

If an insurance company is found liable for a bad faith claim, they may have to pay damages that would far exceed what the claim was originally worth. There are several different types of personal injury damages that you can seek if your insurance carrier has acted in bad faith.


They may include:

  • Personal injury attorney fees
  • Contract damages
  • Economic loss
  • Punitive damages
  • Emotional distress
  • Statutory interest
  • Statutory penalties
  • Being liable for judgments in excess of the policy’s original guidelines


If you feel an insurance company is handling your claim for disability with malicious intent, then you do have the right to make a claim against them. Getting an injury attorneys involved to help you through the process of filing a bad faith claim is an excellent way to ensure that you get what you are entitled to, instead of ending up being denied wrongly or getting less than you should.




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