There is only one reason to buy insurance – to have the peace of mind of knowing that the financial needs of you or your family will be covered in the event of death, catastrophic injury, or long-term disability or illness. When an insurance company denies payment of a valid claim in bad faith, it is practicing the corporate greed version of “what’s mine is mine, and what’s yours is mine.” You pay the premiums when you don’t need coverage, and we’ll keep your money and ours when you do.
Bad faith denial of insurance claims must be countered with immediate and aggressive action. Your insurance policy may have a time limit within which an internal appeal of a claims denial must be taken. Every state has statutes of limitations. Sooner or later if you are wrongfully denied and fail to pursue your rights, you will lose them. The good news in Massachusetts is that insurance companies that engage in bad faith settlement practices are subject to the Consumer Protection Act (“chapter 93A”) and a bad faith law that applies especially to insurance companies.
If an insurance company is found to have engaged in bad faith practices, it can be subject to multiple damages and attorneys fee. Bad faith can include denial of coverage when the plain language of the insurance policy requires coverage. It can also include such favorite insurance company practices as offering less than a claim is worth in order to pressure a financially strapped claimant to accept less than he is entitled to, or to deny an obviously valid claim, forcing litigation to obtain payment that should have been prompt and voluntary. Aggressive action when faced with bad faith insurance practices helps every insurance policy holder to obtain the value of his or her insurance purchase.