Tactics Insurance Companies Use to Avoid Paying Valid Claims

Insurance provides financial protection and peace of mind, but some companies may act in bad faith to avoid paying legitimate claims. These dishonest tactics break the trust between insurers and claimants, undermining the core purpose of insurance. 

Delaying the Claims Process

Insurance companies often delay the claims process by asking for additional, unnecessary documentation, dragging out investigations, or taking an unreasonable amount of time to respond. By stalling, they hope to frustrate policyholders to the point where they either give up or settle for a lower payout to avoid further stress.

Denying Coverage Without Proper Investigation

Insurers are supposed to thoroughly investigate claims before deciding on coverage. However, some companies deny claims without proper investigation. They might misinterpret the policy, jump to conclusions, or ignore key evidence that would support the claim.

Exploiting Ambiguous Policy Language

Insurance policies often contain complex legal jargon, and some companies use this to their advantage. They write policies with vague language and later interpret it in ways that favor denial of a claim, even if the policyholder has a reasonable interpretation that would justify payment.

Undervaluing Claims

Undervaluing claims is another common tactic. Insurance companies may downplay the extent of damage or underestimate the value of lost property, offering settlements far below the actual cost of repairs or replacement. This is particularly common in property damage cases, where the true cost of fixing or replacing items may be much higher than the insurer’s offer.

Retaliation Against Claimants

Sometimes insurers retaliate against policyholders who file claims by raising premiums, canceling policies, or making it difficult to renew coverage. These actions are designed to discourage asserting your rights and filing claims in the future.

Misrepresenting Policy Provisions

Some insurers misrepresent policy provisions, falsely claiming that certain damages or losses aren’t covered when they actually are. This tactic preys on those who don’t fully understand the details of the policies, tricking them into accepting a denial that isn’t valid.

Pressuring a Settlement

Insurance adjusters may use high-pressure tactics to get claimants to accept a quick, low settlement. This approach is particularly effective when people are under financial stress and need immediate funds, making a lower offer seem tempting even though it doesn’t reflect the true value of their claim.

Shifting the Burden of Proof

In a legitimate claims process, the insurance company is responsible for proving why a claim is invalid. Some insurers, however, try to shift the burden of proof onto the policyholder, requiring excessive evidence or documentation to prove that the claim is valid, even when this is unnecessary.

Misleading About Deadlines

Insurance companies may also be misleading about deadlines for filing claims. An adjuster may suggest that the window for pursuing one has passed when it hasn’t.

Contact Us Today

These bad faith practices can leave you feeling betrayed, but a Las Vegas Car Accident Attorney can help. They will thoroughly review the policy, gather necessary evidence, and push back against unfair tactics to ensure you secure the compensation you deserve.