What Is a Bad Faith Insurance Claim?

Bad faith actions by an insurance company are specific failures to handle your claim properly. Common examples include failing to investigate the facts of your loss, denying a claim without a valid reason based on your policy, or offering a settlement far below the actual value of your damage. These actions violate the implied covenant of good faith in your insurance contract.

Another type of bad faith is failing to communicate with you in a timely manner. This includes not responding to your inquiries, not explaining why a claim was denied, or not providing necessary forms. Unreasonable delays in processing your claim or making payments can also constitute bad faith, especially if the delay causes you further financial harm.

Thorough documentation of water damage is critical when dealing with an insurance claim. Clear evidence helps establish the cause and full extent of the loss, which your insurer needs to evaluate. If an insurer denies your claim without reviewing proper documentation, this could later support a bad faith argument. Your own photos and notes are a good start.

For a comprehensive record, consider a professional water damage inspection. The pros use tools like moisture mapping to create a detailed report showing moisture levels in walls and floors. This objective evidence can be vital if your insurer disputes the severity or cause of the damage. It provides a factual basis for your claim's valuation.

Proactive steps after a water leak can help prevent misunderstandings with your insurer. Immediately stop the water source if it's safe to do so, and take reasonable steps to prevent further damage, like placing buckets under a leak. Document the initial damage with photos and videos before any cleanup begins. Then, notify your insurance company to start the claims process.

Hiring local water damage pros for emergency water extraction and structural drying creates a documented, professional response. Their detailed reports on the source, category of water, and drying process provide the clear timeline and methodology insurers expect. This professional approach can streamline the claims process and reduce room for dispute over the necessary remediation work.

• Stop the water source and prevent further damage safely.
• Take extensive photos and videos before any cleanup.
• Notify your insurance company promptly to report the loss.
• Hire pros for documented water extraction and drying services.
• Keep all receipts for temporary repairs or mitigation costs.
• Request a detailed, written scope of work from the pros.