Most disputes between insurance companies and their insureds fall into one of two categories, those being (1) a denial of an insurance claim, and (2) a failure to pay all amounts due under the insurance claim.
The issue of whether an insurance company denied a claim contrary to the terms of their insurance policy is an issue of breach of contract. Because insureds are provided no opportunity to alter terms of their insurance policies, these policies are always interpreted against the insurance company. This means, when there is a dispute over the meaning of a term in the policy, the meaning should be read to provide the greatest availability of coverage available. While this does not mean that insurance policies can be rewritten once a dispute arises, it does mean that insurance companies are responsible for any ambiguity and confusion regarding the policy.
Wrongful Basis Denials
It is the likelihood of multiple interpretations of insurance policies that often serves as a wrongful basis to deny insurance benefits. Oftentimes, claim representatives will wrongfully deny a claim because they fail to recognize either the potentially ambiguous nature of a term in the policy, or simply because they are overburdened with too many claims. In many situations, even though a claim adjuster based his or her denial upon a bona fide belief as to a fact in the claim, the insurance company may still be liable later when it turns out to be wrong. For example, when sinkhole claims are submitted for insurance coverage, insurance companies are required to retain a licensed professional engineer to determine the actual cause. If the engineer informs the insurance professional that no sinkhole activity exists, the insurance company may still be sued for denying the claim, if it turns out the engineer is wrong. This serves to prevent insurance companies from taking lax steps in their claims evaluations, and to assure that the greatest amount of coverage is provided.
To learn more about insurance litigation for the denial of insurance claims, please contact Corless Associates at 813-498-1623 or, toll free: 877-517-5595.
