Updated: Jan 25, 2019
Insurance companies have a legal duty to act reasonably and fairly with their policyholders. This is called acting in good faith, and, by law, it is part of every insurance policy, even though it is never written down.
If an insurance company wrongly denies a claim or makes an offer that is unreasonably low, the company may be breaking the law by acting in bad faith. Indications of bad faith include making false statements about what your policy covers, misrepresenting your rights concerning an insurance claim, not conducting a reasonable investigation, inappropriately denying a claim, and grossly underpaying claims. Other signs of bad faith include claim adjusters being rude, pushy, difficult to contact, and condescending when you talk about hiring an attorney.
Iowa Code § 507B.4(10) states that the following are unfair claims settlement practices:
Misrepresenting pertinent facts or insurance policy provisions relating to coverages of issue.
Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.
Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.
Refusing to pay claims without conducting a reasonable investigation based upon all available information.
Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.
Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear, or failing to include interest on the payment of claims when required under subsection 16 or section 511.38.
Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.
Attempting to settle a claim for less than the amount to which a reasonable person would have believed the person was entitled by reference to written or printed advertising material accompanying or made part of an application.
Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured.
Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made.
Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.
Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information.
Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
Failing to comply with the procedures for auditing claims submitted by health care providers as set forth by rule of the commissioner.
Similarly, if you are sued by someone else (for example, someone accuses you of causing an accident) and your insurance company fails to adequately protect you, it may be acting in bad faith. The most common scenario for this is when your carrier refuses to settle the case when it had an opportunity to do so. This exposes your personal assets.
What should you do if your insurance company has acted in bad faith?
Acting promptly to preserve your rights is extremely important. Insurance companies work hard to prevent people from hiring their own attorney because they want to be the only one with lawyers on their side.
There is no risk to discuss your case; the initial telephone conference with Mr. Nierman is free. Many cases are taken on a contingent basis, meaning that there are no attorney fees unless you collect on your claim.
With +20 years of experience dealing with insurance claims, attorney L. Craig Nierman is well equipped to file and advocate for your claim. While this might be your first time dealing with a challenging insurance situation, Mr. Nierman has filed thousands of claims for his clients. His experience includes working at one of the nation’s largest insurance companies, training attorneys on best practices/techniques, and teaching Insurance Law at the University of Iowa. Even other attorneys retain him to strengthen their insurance cases as an expert witness, testifying in numerous state and federal courts. This experience gives you a significant advantage as we fight for you.
While our firm has a dynamic team of 12 attorneys, paralegals, and other support staff, Mr. Nierman remains directly involved in every case he accepts. With experience with claims involving personal injuries, life insurance, health insurance, homeowners insurance, workers compensation, disability, and wrongful death, we look forward to learning how we can help you move forward. Contact L. Craig Nierman today for a no fee consultation.