Personal Injury Lawyer FAQ: What are Considered to Be Unethical Insurance Practices?

Personal Injury Lawyer

Insurance is meant to protect the policyholder and others from extensive financial losses. However, it is possible for an insurance company to engage in practices that only serve their interests, and could be considered unethical practice. As a personal injury lawyer, we have known of cases that have involved the following unethical practices:

Failure to Communicate – If the insurance company does not notify you when it makes a decision regarding a claim, fails to return your emails or calls, it may be an ethical practice.

Purposely Delaying a Settlement – An insurance company who does not settle in a timely manner, and without good reason, may not be engaging in fair practices. They may do this with the hopes that you will give up or forget about the settlement.

Unreasonable Requests or Demands – Typically this practice will be connected to the delayed settlement. The insurance company might ask of you unpractical or unreasonable demands in order to stall the claim. For example, they might tell you that a large number of documents must be submitted before the claims process can begin. If you don’t meet their demands, they might tell you that they will deny the claim.

Modifying or Voiding the Policy – Sometimes an insurance company will abruptly change a policy after a claim is filed. After, they might cite the policy as the reason why you won’t receive a settlement.

Improper Investigation – Insurance companies will almost certainly investigate a claim after it has been filed. If the company practices illegal methods of investigation or those that are otherwise unethical, it may not only constitute an unethical practice but could be illegal.

Withholding Important Information – It is the duty of an insurance company to disclose all relevant policy information to you; this includes the limits.

Conflict of Interest – In rare scenarios, an insurance company will handle your claim and that of the other parties. This could result in a conflict of interest and other potentially hazardous situations; such as bribery.

A Very Low Settlement – If the insurance company is offering you a settlement that is exceptionally low, and at the same time making up excuses or threatening you in one way or another, it may be a form of unethical practice. You should politely decline and talk with a personal injury lawyer.

Making Threats – If at anytime the insurance company is threatening you or verbally insulting you, it is unethical.

Identifying Unethical Practices By an Insurance Company

Most insurance companies will not engage in the above practices, but there is a small number who do. In general, every form of communication made between you and the insurance adjustor should be in writing. This begins with policy quotes. If at anytime there are changes in your policy, you should be notified and receive an endorsement summary. It is also important to understand your rights as a policyholder. If at anytime something does not seem right, you should consult a lawyer. Finally, following any accident involving negligence it is advisable to ask a personal injury lawyer Milwaukee, WI trusts to review your case before making any rash decisions.

Thanks to Hickey & Turim, SC for their insight into personal injury law and dealing with unethical insurance companies.