Most Americans have some form of insurance. Auto liability insurance, for example, is a requirement to drive in many states, and health care is now mandatory under the Affordable Care Act (AKA “Obamacare”).
Insurance law typically applies to cases of private insurance, such as health insurance, homeowners’ insurance and auto liability insurance. Insurance attorneys work on a variety of matters, including property and casualty claims and bad faith claims.
Without insurance, those who suffer losses, as well as those who cause them, would need to pay those costs out of pocket. A person who has insurance agrees to make payments, called premiums, which are then put into a pool by the insurance company in order to spread the risk over a larger number of policyholders. When an insurance claim is filed, an insurance company may be responsible for paying claims out of the pool.
Insurance Policy Contents and Specificity
Jurisdictions differ in their regulation of policy documents and terms. For instance, state law may prohibit the inclusion of certain types of clauses that result in imbalanced arrangements that favor the policy provider.
Special forms of protection, such as crop insurance and flood insurance, may be governed by rules limiting how policies can be used and the circumstances under which insurers can deny or cancel coverage. Auto insurance is commonly coupled with state-mandated minimum liability limits. State-specific regulations can apply to policyholders and providers, so claimants may find it wise to research whether they actually fulfilled their obligations before filing claims or seeking legal damages.
In some cases, claimants may be accused of insurance fraud, or making false statements or applications to gain benefits. Fraudsters use other people's policy credentials to facilitate such crimes. Because many laws also punish insurance fraud accomplices with imprisonment or fines, those who stand accused should research how they can build cases or disprove the claims that they knowingly misrepresented facts for personal gain.
Insurance Bad Faith
State regulations control how insurance companies are to respond to claims for losses. When an insurance company violates these laws, it may have done so in bad faith. Bad faith claims may involve wrongful denials of claims, making unreasonable demands for documentation or taking too long to respond to a claim.
There is an implied covenant of good faith and fair dealing in every insurance contract. This generally means that both parties agree to act with fairness and honesty so as not to deprive the other party of the right to benefit from the contract. An insurance bad faith claim asserts a violation of that duty. Although it can also be considered a breach of contract, most claims are brought as torts for the chance to receive punitive damages.
Insurance Company Complaints
If you have a complaint about your insurance company, you should first try to resolve it with your agent or your agent's supervisor. If dealing informally with the insurance company doesn’t work, you can file a complaint with the department of insurance in your state. All states have such a regulatory body, but the laws and procedures differ among them.
After a complaint is filed, the insurance company has a deadline for responding. The state agency does not represent policyholders in legal actions against the insurance companies, but their investigations can help insurance attorneys in preparing lawsuits. If the agency determines that a complaint is invalid, it will notify the policyholder with an explanation.
The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.
Additional Insurance Law Articles
- How Your Car Insurance Premiums are Determined
- What is homeowner's insurance?
- Am I required to have homeowner's insurance?
- How can I appeal a denial of a claim on my homeowner's insurance coverage?
- Will homeowner's insurance cover all of my personal property?
- How can I file a complaint against my homeowner's insurance company?
- Will homeowner's insurance cover my vehicles?
- What can I do to reduce my homeowner's insurance costs?
- Why does my homeowner's insurance policy contain Additional Living Expense (“ALE”) coverage?
- What are some common exclusions and/or limitations in homeowner's insurance policies?
- Why does my homeowner's insurance policy contain a provision about Personal Liability coverage?
- What is the relationship between Medicaid and long-term care insurance policies?
- Why does my homeowner's insurance policy contain an Inflation Guard Endorsement?
- Does my homeowners' insurance policy cover mold damage?
- If my home is destroyed and needs to rebuilt, will my homeowners' insurance cover the building permits needed under local laws?
- Do I need special windstorm coverage in my homeowner's insurance policy?
- How do I know how much homeowner's insurance I need?
- What kinds of losses does my homeowner's insurance policy cover?
- What is a deductible, and how high should my deductible be on my homeowner's insurance policy?
- What is the National Flood Insurance Program?
- Can my insurance company refuse to renew my homeowner's insurance policy?
- Do I need special insurance for natural disasters like flooding or hurricanes?
- What do I do if our home is damaged in a hurricane or natural disaster?
- What steps can I take to minimize damages to my home, and thus decrease my insurance costs?
- How can I prepare for potential insurance claims if a natural disaster such as a hurricane is forecast for my area?
- How can I handle my finances in the event of a natural disaster?
- What if I do not have enough insurance to repair and/or replace my home or automobile that has been damaged by a natural disaster?
- How do I know which insurance policy will cover my damages?
- How long will it take for an insurance adjustor to evaluate my damages following a natural disaster?
- Is there any type of flood-related damages that flood insurance will not cover?
- Is there any type of property that flood insurance will not cover?
- Are there separate deductibles that I have to pay for building claims and personal property claims?
- Does flood insurance cover items in my basement?
- What is a “proof of loss” form?
- Do I get to choose who makes the repairs to my home if it is damaged by a natural disaster?
- How is my mortgage lender affected by any insurance claims as a result of natural disasters?
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