How can you take action after a bad faith insurance denial?

When you file a claim for benefits in compliance with a particular insurance policy requirements, you expect that the insurance provider will make good on their obligation to pay your claim.

Unfortunately, insurance companies have a profit motive to deny claims, potentially including valid claims by policyholders. Sometimes, companies refuse to pay valid claims to protect their own financial interests. Such denials, known as bad faith insurance, mean that the insurance company acts in bad faith despite their obligation to the policyholder or claimant.

When you receive a bad faith insurance denial, you have the right to take action against the insurance company and seek compensation. The first step in doing so typically involves verifying your coverage.

Review your policy documentation and all claims paperwork

If you want to prove that a claim denial was the result of bad faith insurance, you need to verify that the claim you made should receive coverage under the applicable policy. Reviewing the language of the policy itself, as well as the claim submitted and any documentation provided to the insurance company, can help you determine whether your claim meets the requirements for coverage under the existing policy.

In some cases, your review could help you locate the issue that resulted in a denial and make it easier for you to resubmit the claim and secure compensation. Other times, the review will simply verify what you already know, which is that the insurance company has attempted to avoid its obligation to you.

Show that the denial was unreasonable

Different kinds of insurance claims can have different reasons for denials. Health insurance policies may decline to cover care that they know should reasonably fall under the responsibility of a premises liability or motor vehicle liability policy. Errors in paperwork, late submissions or failure to subrogate the claim to the right company are all reasonable causes for a claim denial. Just wanting to avoid paying out on it, however, is not.

Legal action is usually the last step

Once you know the policy was active, the claim was appropriate and the denial was likely in bad faith, you can potentially take legal action against the insurance provider. Communicating with them directly or through a lawyer first may help you resolve things outside of court.

Depending on circumstances, either enforcement actions against the insurance company or a civil lawsuit may be the best approach. The kind of insurance, the nature of the claim and many other factors will influence what the best approach may be given your unique circumstances.

No Comments

Leave a comment
Comment Information
Email Our Attorneys

Our Insurance Lawyers Can Help

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

  • American Board of Trial Advocates
    American Board of Trial Advocates A prestigious national association of experienced trial lawyers and judges. Membership is by exclusive invitation only. All members shall have completed 10 civil jury trials to jury verdict or hung jury as lead counsel.
  • Best Lawyers
    Best Lawyers The oldest and most respected peer-review publication in the legal profession. A listing in Best Lawyers is widely regarded by both clients and legal professionals as a significant honor, conferred on a lawyer by his or her peers.
  • AV | PeerReviewRated | Martindale-Hubbell | For Ethical Standards and Legal Ability
    Martindale-Hubbell Peer Review Ratings An objective peer review rating indicator of a lawyer's high ethical standards and professional ability, generated from evaluations of lawyers by other members of the bar and the judiciary. Pillsbury & Coleman founding partner Philip L. Pillsbury Jr. is rated “AV Preeminent.”
  • Super Lawyers
    Super Lawyers A peer-review rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement.
  • Best Lawyers | Best Law Firms | U.S.News & World Report | 2019
    Best Lawyers Best Law Firms U.S. News 2019
  • American Association for Justice | Formerly the Association of Trial Lawyers of America (ATLA)
    American Association for Justice (AAJ) Founded in 1946, AAJ is the world’s largest trial bar and supports the work of attorneys to ensure that injured plaintiffs can obtain justice.
  • American College of Coverage Counsel
    American College of Coverage and Extracontractual Counsel Composed of preeminent insurance coverage counsel in the United States and Canada, representing the interests of both insurers and policyholders. The minimum membership requirement is the practice of insurance law for at least fifteen consecutive years.
  • Association of Business Trial Lawyers | abtl
    Association of Business Trial Lawyers Founded in 1972, ABTL is dedicated to connecting litigators and judges to address issues important to trial lawyers.
  • Consumer Attorneys of California
    Consumer Attorneys of California The only California-wide unified trial bar for plaintiffs lawyers who represent consumers harmed by powerful foes such as insurance companies, pharmaceutical companies, automobile manufacturers and banks.
  • SFTLA | San Francisco Trial Lawyers Association
    San Francisco Trial Lawyers Association For over 60 years, this prestigious bar association has educated and trained trial lawyers and supported and passed critical legislation to protect and advance individuals’ rights.
  • United Policyholders | Empowering the Insured
    United Policyholders A non-profit group dedicated to providing trustworthy and useful information and an effective voice for insurance consumers in all 50 states.
  • America's Top 100 High Stakes Litigators | 2018 | Top 100
    ACCEC | American College of Coverage and Extracontractual Counsel | Fellow