When hearing the phrase “insurance fraud”, most of us assume that the perpetrator is an individual who tried bilking an insurance company out of thousands of dollars via a fraudulent life insurance, automobile accident, or personal injury claim. However, there are situations in which the tables are turned and it’s the individual who sues the insurance company. Here are some examples, courtesy of John Kirby Law in San Diego.
Improper Denial of Coverage or Cancelling of Coverage for Certain Conditions
When an insurance company denies coverage to an individual for a condition that is either covered by the individual’s insurance policy or required to be covered by law, this is insurance fraud. Similarly, it’s also fraudulent for an insurance company to exclude a preexisting condition from coverage, especially after the individual has held the insurance policy for a certain period of time.
Failure to Properly Indemnify or Defend Third-Party Claims
Insurers have a duty to defend their policyholders in lawsuits brought by third parties. Insurers are also responsible for compensating or indemnifying their policyholders when covered claims are brought against them by third parties. If one or both of these conditions are not met, the insurer can be sued for fraud.
Failure to Comply with Claim-Investigation Standards
Most states have laws on the books that state what the minimum requirements are for an insurance company when investigating a claim. Most of these laws state that an insurer must conduct a “thorough investigation” of each claim. If an insurance company fails to contact/talk with the claimants and providers involved in the claim, this could be considered insurance fraud.
Prolonged Delay In Claim Handling
Laws exist which stipulate the period of time in which an insurance company must respond to a claim. For example, here in California insurers must accept or deny a claim no more than 40 days after receipt, or provide the claimant with a written request within the 40-day period for more time to analyze the claim. An insurance fraud case can be made if an insurer does not respond within the legally-binding timeframe.
Deliberate Undervaluing of Claims/Losses
If an insurance company is caught paying a claimant an amount less than what is specified by the claimant’s policy, or the insurance company is found to have deliberately undervalued a claim, we recommend contacting our insurance fraud attorney near San Diego.
Improper Claim Denial
An insurance company cannot refuse to pay a claim “without just cause or action”. The insurer must, within a certain period of time following the denial, furnish an explanation to the claimant as to why the claim was denied. Failure to do so could be considered fraudulent behavior.
Misrepresentation Of Facts/Policy Provisions
This is the kind of fraud that exists in numerous industries: consciously misrepresenting to claimants certain facts concerning insurance coverage as a whole, or misleading claimants about the provisions within their personal insurance policy.
Our San Diego law firm has extensive experience handling insurance fraud cases. If you feel that your insurance company has defrauded you in one of the ways described above, contact us today for a consultation.