Alabama law imposes a duty of "Good Faith and Fair Dealing" on insurance companies in both the sale of insurance policies and the handling or processing of insurance claims. An insurance company must act in utmost good faith in the interpretation of their policies, and in the investigation and payment of claims.
It is unlawful for an insurance company to engage in unreasonable delay, put their financial interests ahead of the financial interests of the policyholder, or lowball (underpay) claims. While it is the typical scenario, insurance companies should not be allowed to force an insured to hire an attorney, just to be paid what they are owed under the policy. The law requires insurance companies to be fair to their policyholders.
Insurance companies know they can typically delay, delay, delay and capitalize on your frustration, hoping you'll accept a minimal settlement of your claim. Always remember, the cardinal rule of insurance companies is to pay as little as possible
It is important to understand the value of your claim. Most insurance companies have resorted to a computer generated valuation of your claim, designed to automatically give you a lowball estimate. In fact, almost any insurance adjuster or claims specialist you deal with directly has no independent authority in evaluating and settling your claim, until faced with the prospect of litigation.
This is why it is important to get a lawyer involved early in the process anytime you are dealing with an insurance company. A lawyer will ensure you are getting the true value of your claim, typically without the necessity of a lawsuit. Moreover, once a lawyer is involved, settlement tends to come more quickly.
Sometimes an insurance company refuses to pay at all. This happens when an insurance company either fails to properly investigate an insurance claim or simply breaches it's duty of good faith by refusing to pay policy benefits on a valid claim; this despite collecting valuable premium from you for insurance coverage. While all too frequent, these unfair practices may entitle you to a significant award against the insurance company (including recovery of punitive damages).
If you have an insurance claim, call me to get free advice regarding your claim. Be aware that to get what you're paying for against insurance companies, you have to know something about your rights.