Bad Faith Insurance Companies and Consumer Recourse
What recourse is there for the claimant (also referred to as victim) against Insurance Companies acting in Bad Faith?
As told by FBIC, (Fight Bad Faith Insurance Companies) located on the web at "www.badfaithinsurance.org". (As FBIC is neither a lawyer or law firm, it notes that it cannot give legal advice and therefore nothing enclosed in this article should be considered or misconstrued as legal advice. Only a lawyer can give legal advice.)
About FBIC (www.badfaithinsurance.org) :
The idea of FBIC's website is simple – we want to show consumers that they are not alone; instead they can join millions of other people with similar complaints. Bad Faith Insurance companies have come up with millions of excuses, over the past two hundred years, to misrepresent the consumer and not pay claims—all for their own profit reasons.
FBIC is a non-profit organization, founded in 1997 and on the Internet since 1998. One of our biggest accomplishments was taking and applying the necessary increased consumer pressures onto the state government's Departments of Insurance which regulates the Insurance companies operating in their state. But it is a day-to-day battle. We estimate there are one million plus insurance complaints in the US yearly...our website has gotten upwards of 50,000 bad faith related complaints.
When we first started the website, we told every complainant to do two things:
1. Complete Our Bad Faith Survey (www.badfaithinsurance.org/badfaith_survey.html)
Complete our bad faith survey on our website . We use it as part of our process to rank insurance companies. Claimants will at least find some satisfaction by venting their emotions and finding an outlet to express their poor results with the insurers. This information can also benefit others.
We have more information on insurance companies [listed on our website] than you can imagine. We did a lot of research into bad faith insurance statutes before finalizing our bad faith complaint form: we made sure that the survey in each state was applicable to that specific state’s statutes.
And now we are inundated with complaint forms.
2. Complain to Your State Department Of Insurance
Write a complaint to your State Department of Insurance or your state's insurance regulatory body. In the US, each state regulates the insurers so to find contact information for each state's Department of Insurance, you can either do your own Internet search to find that information and/or you can find a link directly from two different places on our website ("www.badfaithinsurance.org/links.html" or "www.badfaithinsurance.org/doi.html"). Since 1998, there have been more state government websites handling complaints. In 1997 five states had Department of Insurance websites. Today every state has one.
Complain that the Insurance Company Won’t Pay Your Claim
Now what? It is important that you keep a record. No matter which avenue you decide to take, do your homework. People write us all the time asking for help and we respond by providing the necessary information, but victims or claimants need to first realize that they are going to have to do some legwork; don’t look for others to do it for you as most likely it won't happen. Once you have looked up the website of your state regulatory agency Department of Insurance, find the right representative or the commissioner, and submit a complaint in writing to make sure that you set the record.
Unfortunately, in many cases the regulatory authorities are busy, and that is another problem—they’ve got more on their plates than they can handle-- so to use an old adage, if you want something done, you are going to have to do it yourself.
Fighting Back, Your Options
1. Go to small claims court – each state has its own $$$$ limit. We have found that much of the time insurance companies don’t bother sending a representative, so you win by default. Beat them at their own game – you are right and honest, they are wrong.
2.Your claim is too high for small claims court but not big enough to hire a lawyer -- look for a law school that has a law student clinic who will take the case on a pro bono, small charge or contingency basis – there may not be enough monies owing you to warrant a lawyer.
3. As appropriate, hire an independent public insurance adjuster. Some are terrific—all adjusters are not created equal so it is important to check their references. Most adjusters take a small percentage (10%) as commission but generally speaking, you will get a lot more with an adjuster—even with their commission —than you would on your own. If you can't find an independent adjuster from personal contacts or references, look in the Yellow Pages or on the Internet. Chances are they know the insurance company and/or the adjuster who is giving you a hard time.
4. You need to get a lawyer. An independent adjuster may still apply and they are experts at the ability to put a value on your claim that any court will recognize. A lawyer can then take that value, use his or her legal expertise and ultimately sue based upon your information and the independent adjuster’s findings.
Bad Faith Insurance Companies
We have a dedicated team that is determined to expose these companies and others like them. Since the beginning, we wanted to get consumers to fight and not walk away. It is still our major goal today. We put tremendous pressure on state officials. Some are honest but many are dishonest. We are here to do right by the people and more bad faith insurance companies have been exposed in the past eight years than in the past 200 years combined. It is an outrage that bad faith insurers can get away with their illegal practices. A lot of times people don’t believe it until it happens to them. And it happens enough that communications are growing – health insurance has really pushed the envelope on people’s distrust in this area. Today, more and more lawsuits are being won by plaintiffs and consumer victims against insurers.
Since 1997 I have seen the number of insurance complaints grow exponentially. But thanks mainly to the Internet and the Freedom of Information Act, bad faith insurance companies have been exposed for what they are. Finally, insurance companies are more and more being held accountable, both in and out of court and by the media to make good on their insurance policies.
We (consumers) are changing the law. Voice your concerns and complaints to your local political representatives. Our elected officials are becoming more concerned about how they appear to their voting constituents, and so they should be. Some of them are finally paying attention. Keep in mind that they are there to do a job for us, and the politicians must also have more accountability.
Remember, an insurance company can lure you by saying that they pay promptly and properly. Never forget that it is illegal to deny or delay payment.