When you purchase an insurance policy—whether it’s health, disability, life, or property—you expect the provider to uphold their end of the agreement. Unfortunately, some insurers use tactics that delay, underpay, or outright deny legitimate claims. This behavior, known as unfair claim practice, can leave policyholders financially vulnerable during some of the most difficult moments of their lives. Knowing how to hold insurers accountable is crucial.
What Are Unfair Claim Practices?
Unfair claim practices refer to the actions or inactions by insurance companies that breach their duty of good faith and fair dealing. These include unjustified denial of claims, unreasonable delays in payment, failure to conduct proper investigations, or misrepresentation of policy coverage. These tactics can be emotionally and financially draining, especially for those relying on long-term disability or life insurance benefits.
Recognizing the Red Flags
Insurance companies may use subtle strategies to discourage policyholders from pursuing their rightful benefits. Common signs of an unfair claim practice include:
- Repeated requests for the same documentation
- Vague or contradictory explanations for denial
- Pressure to accept a low settlement
- Ignoring communications or failing to respond in a timely manner
If any of these red flags appear, it’s a signal that you may need legal assistance to ensure your rights are protected.
Taking Legal Action
Policyholders are not powerless. State and federal laws provide mechanisms to challenge insurance companies that engage in bad-faith practices. In many cases, initiating a legal claim can lead not only to the recovery of benefits but also to punitive damages if the insurer is found to have acted maliciously or deceitfully.
One example is a lawsuit with UNUM, where policyholders alleged the company systematically denied valid disability claims. These types of lawsuits shine a light on industry-wide practices and can result in significant reform, both within the company and the wider insurance landscape.
The Role of Legal Support
Attorneys who specialize in insurance litigation can play a pivotal role in leveling the playing field. They understand the tactics used by insurers and know how to apply pressure through legal channels. Moreover, legal professionals can help gather documentation, communicate with the insurer, and if necessary, take the matter to court.
Choosing to work with a lawyer doesn’t mean a lawsuit is inevitable—it means you’re protecting yourself from being taken advantage of.
Creating Long-Term Change
Beyond individual claims, holding insurers accountable helps create lasting industry change. When courts rule against companies using bad faith tactics, it sends a message that unfair treatment of policyholders won’t be tolerated. This ripple effect can lead to improved claims handling procedures and more transparency across the board.
Final Thoughts
Insurance is meant to provide peace of mind during uncertain times, not added stress. When companies fail to honor their promises, it’s up to consumers—often with the support of legal professionals—to hold them to account. If you suspect you’ve been subjected to unfair claim practices, don’t hesitate to explore your options and protect your rights.
