Insurance companies are some of the biggest advertisers in the country. They spend their massive budgets trying to convince people that they are friendly and helpful. They want policyholders to trust that they will receive fair treatment when making a large claim. Unfortunately, insurance companies may engage in behaviors intended to undermine the rights of those who have purchased insurance coverage. Low insurance settlement offers are among the most common forms of bad faith insurance practices.
What are some of the warning signs of a settlement offer that isn’t appropriate?
1. Offers that don’t cover costs
People filing insurance claims may already have a rough idea of their total losses. When the settlement amount falls substantially short of the total expenses generated or losses sustained, it may constitute a bad faith offer because it does not adequately address the needs of the policyholder.
2. Offers below policy limits
Sometimes, the amount offered is less than a person requires but the maximum amount the insurance company can pay. An offer that is well below the policy limits, on the other hand, may represent an attempt to prioritize saving money for the company ahead of honoring financial obligations to policyholders.
3. Misrepresentations of the situation
If an insurance professional makes statements during negotiations that imply the policyholder is partially at fault or that the policy does not truly apply to the scenario, their goal may be to undermine the rights of the policyholder. They may then offer a low settlement with claims of being cooperative or compassionate, when the reality is the policyholder deserves more.
Working with an insurance professional reduces the risk of lowball insurance offers and may make it easier to counter them as well. Legal professionals can help policyholders hold insurance providers accountable for their refusal to uphold a policy in good faith.