When you purchase insurance, you expect your provider to act in good faith—to honor the terms of your policy and handle claims honestly, fairly, and promptly. Unfortunately, this is not always the case. Sometimes, insurance companies engage in what’s known as “bad faith” behavior, which can leave policyholders feeling helpless, frustrated, and financially vulnerable.
If you believe your insurer is acting in bad faith, documentation is your strongest ally. Carefully tracking every interaction and gathering relevant records can significantly impact the outcome of your case if you decide to pursue legal action.
Understand What Constitutes Bad Faith
Before you can document bad faith, it helps to understand what it looks like. While specifics vary by state, common examples of bad faith conduct include:
- Unreasonably delaying the processing or payment of a claim
- Denying a valid claim without a clear or reasonable explanation
- Failing to properly investigate the claim
- Offering less money than the claim is worth
- Misrepresenting policy language or facts to avoid paying
Not every claim denial constitutes bad faith. However, if your insurer is clearly acting against your best interests without valid justification, it may be a sign of misconduct.
Keep a Communication Log
Start by documenting every interaction with your insurance company. Maintain a log that includes:
- Dates and times of phone calls or in-person meetings
- Names and job titles of representatives you speak with
- Summaries of conversations, especially any promises made or explanations given
- Copies of written correspondence, including emails and letters
Be consistent and detailed. Even brief notes can be powerful evidence if patterns of delay or deception emerge.
Save All Policy and Claim Documents
Keep a dedicated file with all paperwork related to your insurance policy and the claim in question. This should include:
- A copy of your original insurance policy and any amendments or riders
- Claim forms and submitted documentation
- Photographs or receipts supporting your claim
- Letters or emails from the insurer, including denial letters
- Any estimates or evaluations provided by third parties (e.g., contractors, appraisers, mechanics)
Make digital copies of everything and back them up securely. Organizing this documentation early can save time and confusion down the line.
Request Explanations in Writing
If your insurer denies your claim or offers a lower payout than you expected, request a detailed written explanation. Insurance companies are typically required to provide one. Having their reasoning on record gives your attorney something to review and potentially challenge.
A vague or incomplete explanation—especially when paired with other suspicious behavior—may strengthen your bad faith case.
Don’t Rely on Verbal Promises
Always ask for important statements or decisions in writing. If a representative tells you they will escalate your claim, increase your payout, or meet a specific deadline, ask them to confirm it through email. Without written confirmation, these promises can be hard to prove later.
Monitor Deadlines and Timeframes
Insurance companies must adhere to legal timelines when processing claims. These timeframes vary by state but generally require prompt acknowledgment, investigation, and payment decisions. As a result, track the dates you submitted your claim, received responses, and—importantly—any missed or delayed payments.
Unexplained delays or missed deadlines are red flags and can be documented as part of your evidence.
Consult a Bad Faith Insurance Attorney
If you suspect your insurer is acting in bad faith, don’t wait too long to seek legal advice. An experienced attorney can review your documentation, advise you on your rights, and help determine if a lawsuit is appropriate. In some cases, policyholders may be entitled to additional compensation beyond the original claim, including punitive damages.
At Abourezk Law Firm, we have extensive experience standing up to powerful insurance companies and holding them accountable. If you believe you’ve been mistreated, please contact our office today to schedule a consultation.