Dealing with Bad Faith Insurance
Insurance companies have a duty to their customers. They are their safety net when something goes wrong. When disaster strikes, they are there to help customers replace their damaged property. At least they are supposed to. What happens when an insurance company acts in bad faith? What does that even mean? It might be an odd term. Acting in bad faith through means not doing their job. When speaking of acting in bad faith, there are first party and third party instances. In this article, we will explore the first party acts in bad faith.
When you make an insurance claim, the insurance company has steps to take. They have to perform a full inspection. Once that gets done, they decide if it’s covered by your policy. Finally, they determine how much to pay you for the damaged goods. In an ideal situation that all happens without incident. In an act of bad faith, a part of this doesn’t happen according to plan.
Before we get into this area though, we need to understand two terms. Actual Cash Value and Replacement Value.
Actual Cash Value: This is the value of something minus depreciation. So say you paid $500 for a beautiful armchair. Two years later a disaster destroys it. Over those 2 years, depreciation would lower the value of the chair. Now it might only be worth $250. That is what you would get paid by the insurance company.
Replacement Value: Replacement value means the value to replace it without depreciation. With Replacement Value, your $500 armchair would get replaced with a $500 armchair.
So, how can an insurance company act in bad faith? It can occur in any step. They can perform a poor inspection and miss key points. They can decline coverage on the property covered by your policy. Finally, they can offer to pay less than the damaged property is worth.
Any combination of these three can stall progress in rebuilding. Once you face a disaster, you don’t want to fight another battle to get back on your feet. Let Ward T. Berg stand and fight for you. The Law Offices of Ward T. Berg have years of experience fighting for clients’ rights. Put that experience to use in your case. Call today.