Insurance Bad Faith in Montana: When Insurers Break the Rule

Insurance Bad Faith in Montana: When Insurers Break the Rule

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Miller Tourtlotte Law

April 17, 2024

You pay your insurance premiums on time, expecting your insurance company to be there when disaster strikes. Unfortunately, some insurers prioritize profits over policyholders, employing unfair tactics known as “bad faith.” Understanding these practices is essential to protect your rights if you face unreasonable delays, denials, or lowball settlement offers.

What is Insurance Bad Faith?

Insurance companies have a legal obligation to act in “good faith” when dealing with your claims. This means they must be fair, honest, and act promptly to investigate and process claims in accordance with Montana law (MCA § 33-18-201). Bad faith occurs when an insurer knowingly or recklessly breaches these duties.

Common Examples of Insurance Bad Faith

Bad faith practices are wide-ranging. Here are some common examples Montana policyholders might face:

  • Unreasonable Delays: Insurers must acknowledge your claim promptly, start their investigation without unnecessary delays, and offer a decision (payment or denial) within a reasonable time (MCA § 33-18-201). Stalling tactics or intentionally making the process difficult could be bad faith.
  • Undervaluing Your Claim: Offering you compensation far below the true value of your damages is a red flag. Insurers can’t lowball you simply to save money or pressure you into a quick settlement (MCA § 33-18-201).
  • Misrepresenting Your Policy: Denying coverage by twisting policy language, misinterpreting terms, or claiming exclusions that don’t apply are forms of bad faith.
  • Wrongful Denials: Refusing to pay a legitimate claim without a reasonable basis or proper investigation can violate the insurer’s obligation to act fairly (MCA § 33-18-201).
  • Demanding Excessive Documentation: Requesting unnecessary or repetitive information simply to wear you down can be a bad faith tactic.
  • Using Confusing Language: Insurers can’t hide behind jargon or complex terms to mislead you about your rights or the value of your claim.

Types of Insurance Where Bad Faith Occurs

While bad faith can happen with any type of insurance, it’s often seen in the following areas:

  • Auto Insurance: After a car accident, your insurer may downplay your injuries, offer an unfair repair estimate, or even deny a valid claim under your own policy.
  • Homeowners Insurance: Disputes over property damage value, covered perils (flood, wind, fire, etc.), or outright denials are areas where bad faith can arise.
  • Health Insurance: Wrongfully denying coverage for medically necessary treatments, misclassifying procedures, or creating bureaucratic hurdles to delay care can occur.
  • Disability Insurance: Insurers sometimes invent reasons to terminate benefits or deny legitimate disability claims, leaving policyholders in financial hardship.

What to Do If You Suspect Bad Faith

  • Document Everything: Keep meticulous records of all communication with your insurer, including dates, names, and what was said. Save copies of letters, emails, and claim documentation.
  • Don’t Sign Releases Without Legal Advice: Insurers may try to get you to sign a quick settlement release that waives your right to further compensation. Never do this without consulting an attorney.
  • Know the Value of Your Claim: Research and calculate your total damages, including future medical needs, lost income, and property damage. This helps you spot lowball offers.
  • Consult an Insurance Bad Faith Lawyer: If you believe your insurer is acting in bad faith, an experienced attorney can assess your case and fight for your rights.

Consequences of Insurance Bad Faith

Montana takes bad faith seriously. If an insurer engages in these practices, victims may be entitled to:

  • The full amount of their insurance claim
  • Additional damages exceeding their policy limits
  • Punitive damages in cases of egregious bad faith
  • Attorneys’ fees and court costs

Fighting Back: Miller Tourlotte Law, PLLC

Insurance companies have teams of lawyers protecting their interests. You deserve the same! We have the experience to identify bad faith tactics and hold insurers accountable. Don’t let an insurance giant push you around – we’ll fight for the compensation you’re owed.

Disclaimer: This blog is for informational purposes only and should not be taken as legal advice. If you suspect bad faith, contact an experienced attorney.

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