When Can Insurers Lawfully Deny a Claim?
Insurance companies are paid to cover valid claims, but this does not mean they are above engaging in some pretty questionable practices from time to time. There are instances, however, when claims – for one reason or another – are not valid, and in these cases, claim denials are in keeping with the law. There are also times when insurance companies deny claims out of hand or for invalid reasons, and in these cases, their actions can qualify as bad faith. If you believe that your claim to your own insurance company has been denied in bad faith, you need the professional legal counsel of an experienced Lancaster bad faith insurance attorney.
Claims Denials in Pennsylvania
An insurance company can only deny a claim in Pennsylvania when they have a valid reason for doing so. Some common reasons that an insurance company may deny a claim include:
Policy Exclusions : The claim may be for an event or circumstance specifically excluded by the policy. Common exclusions might include intentional acts, certain natural disasters, or specific types of damage or loss.
Non-Disclosure or Misrepresentation : If the insured failed to disclose important information or misrepresented facts when applying for the policy, the insurance company may deny the claim.
Lapsed Policy: If the policyholder has not kept up with premium payments and the policy has lapsed, the insurer can deny claims made during the period when coverage was not in effect.
Fraud: If the insurance company finds that the claim is fraudulent, it can be denied. This includes situations where the insured provides false information or attempts to exaggerate the loss.
Lack of Coverage: The claim may be for something that is simply not covered under the policy.
Non-Compliance with Policy Terms: If the insured did not comply with the terms and conditions outlined in the policy, such as failing to report the loss in a timely manner or not providing necessary documentation, the claim could be denied.
Although there may be valid reasons for an insurer to deny a claim, each claim is a unique situation and policyholders have the right to contest a denied claim. If you believe that your claim has been wrongfully denied, our experienced Lancaster bad-faith insurance attorneys can help.
When Claim Denials Qualify as Bad Faith
Although there may be valid reasons for an insurer to deny a claim, not every claim denial is legitimate. Insurance companies are driven by profits, and sometimes, they stoop to bad faith practices like the following:
- Denying claims without conducting proper investigations
- Denying claims arbitrarily
- Denying claims in the hope that claimants will simply give up
- Denying claims based on very thin evidence
Your Bad Faith Claim
If your claim has been unlawfully denied, you may have a strong bad faith case which can lead to compensation for both the original claim as well as “extra-contractual” bad faith damages including interest, costs, attorneys’ fees and punitive damages. It is advisable for policyholders to seek legal counsel if they believe their claim has been denied in bad faith to navigate the complex legal process and ensure their rights are protected.
Consult with an Experienced Lancaster Bad Faith Insurance Attorney Today
The savvy bad faith insurance attorneys at HGSK Injury Lawyers – proudly serving Lancaster, Pennsylvania – harness the full scope of our imposing experience and legal skill for every client we represent, and our impressive track record speaks to our focus and commitment. Bad faith cases are important cases that hold insurance companies to task, so please don’t put off contacting us online or calling us at 267-350-6600 and scheduling your free consultation today.