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What can you do if your insurance claim is underpaid?

| Jun 9, 2021 | Insurance Law |

A car crash that leaves you injured could mean thousands of dollars in medical costs, a lengthy hospital stay that requires paid child care support because you can’t be at home and property damage in the tens of thousands of dollars.

If the company insuring the other driver offers to settle your claim, you may jump at the opportunity to secure financial support and pay some of your past due bills. Only after you run out of settlement funds and realize you still have bills rolling in do you start to understand how inappropriately low the payout on your claim was.

When you accepted the settlement and received the funds, the insurance company no longer has any obligations to you. Does that mean you have to suffer financial losses because the insurance company tricked you?

You can’t undo a settlement, but you might be able to prove bad faith

The terms of the settlement are usually clear. When you agree to a specific amount, you no longer have the ability to bring a future claim against the insurance provider. Sometimes, when there are unexpected complications, like a broken arm that leads to someone developing Complex Regional Pain Syndrome (CRPS), a company may reconsider the settlement they offered in light of that new information.

Unfortunately, many companies will not offer additional compensation to a claimant when their diagnosis or prognosis changes. Thankfully, while you can’t back out of a settlement just because you are unhappy with it, you may be able to show that the insurance company acted in bad faith by offering you such a low settlement amount.

Bad faith insurance involves companies intentionally avoiding their obligations

Every insurance company has a profit motive that affects the way they handle claims. The more they pay on each claim and the more claims that they approve, the less profitable the business will be.

Insurance adjusters and those tasked with settling claims will often trick or manipulate claimants into accepting settlements that don’t benefit them. If you can show that the amount offered is far lower than what the company would expect your expenses to be and that the policy would have covered more, you may be in a position to make a bad faith insurance claim against the company.

If the courts agree with your assertion that the insurance provider acted in bad faith, then you may receive not only more compensation as is appropriate under the policy but punitive damages because of the company’s misconduct in handling your claim.

The better you understand your rights as a claimant with a serious injury, the easier it will be to fight back against low-ball settlement offers and other forms of bad faith insurance.