Insurance Disputes

Your Insurer’s Duty to You

Oklahoma recognizes the tort of a bad-faith breach of contract stemming from an insurer’s duty to deal fairly and act in good faith with its insured. In order to have bad faith, there must be a contractual or statutory relationship between the insurer and the person entitled to be paid from the proceeds. The essence of a bad-faith action is the insurance company’s unreasonable conduct.

To be successful in court, the insured party must prove:

1. He/she was covered under the liability insurance policy issued by the insurance company and the company was required to take reasonable actions in handling an injured third party's claim.

2. The actions of the insurance company was unreasonable under the circumstances

3. The insurance company failed to deal fairly and act in good faith toward the insured in their handling of the third-party claim.

4. The breach or violation of the duty of good faith and fair dealing was the direct cause of any damages sustained by the insured.

When insurance companies fail to honor their end of the contract and wrongfully deny coverage or underpay claims, it can have disastrous consequences. People spend their hard-earned money purchasing protection through various types of insurance policies such as medical, life, auto, homeowners, renters, business and more, so they can have peace of mind when they need it—and it is not cheap.

Common Causes of Insurance Disputes

The goal of any insurance company is to save money—they are for-profit companies and are in the business of paying out as little as possible. They are constantly working to find ways to reduce their exposure; the less money they pay in claims, the more they get to keep in their pockets. While many of them will honor valid claims, there are some that will do everything they can to save money, including undervaluing or denying your claim.

Examples of bad faith conduct could include the following:

Most people involved in disputes with their insurance companies never take any action against the company because they do not think they have any recourse or they are too afraid it will affect their coverage. If you believe your insurance company has wrongfully denied your claim, try to find out why. Ask the company to send you something in writing outlining the reason for their denial. The denial may be a result of missing documents and could be remedied rather quickly.

For example, the adjuster may need additional documentation in order to properly evaluate your claim (i.e., an affidavit of loss, medical records, medical bills, death certificate, marriage license, car title, and things of that nature). If your denial was related to medical treatment or medication, it may be that your medical provider entered the wrong code on the insurance form submitted to your insurance provider and needs to resubmit it using different codes. Sometimes health insurers will deny medications or more expensive procedures than other options available. In those situations, it usually helps to ask your physician to send a letter to your insurance company outlining why he/she prescribed one medication over another and why the cheaper medication or procedure would not work best for you.  

It is important to document all of your communications with your insurance company including information such as date, time, the name of the person you spoke with and a summary of what was said in the conversation. Make sure to save all letters and emails related to your claim; this information will be very helpful if you end up seeking legal help. And, remember to be polite in your dealings with the company—you can catch more bees with honey than with vinegar.