How do I know if I Have Coverage for a Claim?

This is a great example of why you should contact us as soon as you suffer a loss. We are well versed in residential and commercial Insurance Policies and Coverages. Insurance policies are a contract of adhesion. A contract of adhesion is a contract between two parties that does not allow for negotiation. It is a “take it or leave it” contract that often favors the party that wrote the contract. There is no power to negotiate, because one party often has an unequal bargaining position. This is the single biggest reason why so many conflicts arise between insurance companies and their policyholders. The policyholder feels that the insurance company should fulfill their promise to pay claims at all times as long as they are paying a premium, but the contract they signed was a standard form that often benefits the insurance company.

The standard form is written to protect the insurance company from too much exposure to risk. This is done in such a way to allow the insurance company to turn a profit, even when they pay claims on a daily basis. The state and federal court system will often side with the policyholder in a dispute for the very reason that insurance contracts are contracts of adhesion. Courts know that these contracts favor the insurance company, so often ambiguity in the language of the contract can be favored toward the policyholder.

Sources:

http://www.finweb.com/insurance/characteristics-of-insurance-contracts.html

What is Bad Faith?

Bad faith defined:
An insurance company has many duties to its policyholders. The kinds of applicable duties vary depending upon whether the claim is considered to be "first party" or "third party." A common first party context is when an insurance company writes insurance on property that becomes damaged, such as a house or an automobile. In that case, the company is required to investigate the damage, determine whether the damage is covered, and pay the proper value for the damaged property. Bad faith in first party contexts often involves the insurance carrier's improper investigation and valuation of the damaged property (or its refusal to even acknowledge the claim at all). Examples of bad faith include undue delay in handling claims, inadequate investigation, refusal to defend a lawsuit, threats against an insured, refusing to make a reasonable settlement offer, or making unreasonable interpretations of an insurance policy. The policyholder must be damaged, for example, if an insurance company refuses to make a reasonable settlement offer which the policyholder wants, and the policyholder is later subject to a judgment in excess of the policy limits, that is damage.

Sources;

http://www.absoluteastronomy.com/topics/Insurance_bad_faith

http://en.wikipedia.org/wiki/Insurance_bad_faith