Was Your House Fire Insurance Claim Denied in Bad Faith?

Posted on June 5, 2023


Long Nguyen | author

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ICHQ | Site Author

House fires are common in the US and affect around 358,500 homes annually. Issues like faulty heating equipment and electrical issues often cause these disasters.

Many fire insurance claims are denied each year, and some policy providers use bad faith tactics to do that. Read on to learn what bad faith tactics are and everyday examples.

Reasons Your Policy Provider May Use to Deny Your Fire Damage Claim

Most insurance companies will deny a fire insurance claim when:

  • There is sufficient reason to suspect insurance fraud
  • Their investigators discover evidence of arsonist behavior, like the use of accelerants
  • The claimant withholds crucial information or acts dishonestly
  • The claimant’s policy didn’t cover the type of fire that occurred
  • There’s no proof of the value of the items lost in the fire
  • Unapproved works or projects caused the fire

If your claim is affected by any or a combination of the issues listed above and your policy provider decides to deny it, they will notify you.

Bad Faith Tactics That an Insurance Company Can Use to Deny Your Claim

Sometimes, insurance companies use bad faith tactics and practices to deny their policyholders’ valid claims. For instance, your policy provider may:

Denying your claim outright without any reason

After submitting your claim, the policy provider is supposed to tell you if it has been accepted or denied. More importantly, the company should clearly explain its decision, especially if it involves the refusal to settle your claim. But, if your insurer denies your claim unjustifiably and refuses to offer any suitable explanation, they can be acting in bad faith.

Failing to carry out a prompt and thorough investigation

Insurance companies should use thorough and prompt investigations to get to the bottom of any issue. For instance, after filing a fire insurance claim, your policy provider should dispatch adjusters and investigators to gather information used to ascertain the incident’s origin. If they fail to do so, you have a reason to suspect bad faith tactics.

Intentionally misrepresenting policy language

In insurance, misrepresentation refers to misleading or false statements that an insurer can use to void a contract or deny claims. A misrepresented statement is categorized as a bad faith tactic when the policy provider does it intentionally and uses it to deny a valid claim.

Offering an unreasonably low settlement offer

Policy providers are supposed to use several factors to determine fair compensation in a fire insurance claim. These include policy terms, incurred damages, and liability. But some act in bad faith and intentionally offer unreasonably low sums to policyholders while attempting to pay the lowest amount possible, known as the absolute minimum.

How Can We Help You?

If, after filing a fire insurance claim, you suspect your policy provider is acting in bad faith, contact Insurance Claim HQ. We have skilled attorneys ready to review your case to determine if you are a victim of bad faith tactics and practices. We will help you fight the unfair treatment from bad faith insurance attorneys. Reach out to us today or visit any of our offices.

Bad Faith Insurance FAQs

What happens when I win a case against an insurance company that acted in bad faith?

Bad faith tactics are illegal. Through these laws, some states require guilty policy providers to pay basic damages to victims of unjustly denied claims.

Do I need to hire an attorney for bad faith litigation?

Yes. A trained lawyer is necessary because they have the knowledge required to determine if you have a valid claim and the skills needed to negotiate with your policy provider successfully.