What Duties Does an Insurance Company Owe to Policyholders?

Insurance companies have certain duties or responsibilities to their policyholders. When you purchase an insurance policy, you are entering into an agreement with the insurance company. In exchange for paying the premium on time every month, quarter, or year, the insurance company will cover qualifying claims.

Although this arrangement might seem perfectly fair, many people find out the hard way that insurance providers will go to great lengths to undervalue and deny claims. Fortunately, insurance carriers owe certain duties to policyholders, and failing to fulfill these duties might provide grounds for an insurance bad faith claim.

If you were recently hurt in an accident but the insurance provider failed to investigate, indemnify, defend, or settle within reason, contact Gump & Faiella to discuss your case. Our insurance bad faith attorneys help clients in Moberly, Columbia, and throughout Missouri. Call 800-264-3455 to schedule a free consultation.

Let’s take a closer look at an insurance company’s duties to policyholders:

  1. The Duty to Investigate 

Insurers have an obligation to investigate every claim that comes their way. They must also provide their findings within a reasonable period of time. If you do not receive any information regarding their evaluation, it could be indicative of insurance bad faith.  

  1. The Duty to Indemnify 

Insurance providers must respect third-party claimants, even though they are not direct customers. If a third-party claimant has a valid case, the insurer must process the claim in good faith. 

  1. The Duty to Defend 

Insurers must defend their policyholders against claims, even if the policy does not cover portions of the suit. This is known as the duty to defend, and it applies in all kinds of tort-related scenarios. As long as the policyholder purchased general liability coverage, the insurance provider may have a duty to defend. 

  1. The Duty to Settle 

Since lawsuits can expose policyholders to financial liabilities that exceed their coverage limits, insurers typically have a duty to settle reasonably. Of course, this obligation only applies when the claimant has a valid case.

If the insurance adjuster is uncooperative, though, that does not necessarily mean your claim is invalid. It could simply mean the company is acting in bad faith, at which point you should seek legal counsel.

Unfortunately, just because insurers are aware of these duties does not mean they always abide by them. Insurance companies are businesses like any other, and they ultimately care about their bottom line above all else.

Call 800-264-3455 to Speak with an Insurance Bad Faith Attorney in Missouri 

When an insurance provider has refused to pay for a covered loss without reasonable justification, you may have grounds for an insurance bad faith claim. To determine the best way to proceed, turn to Gump & Faiella.

We have recovered more than $250 million for our valued clients in successful settlements and verdicts. Call 800-264-3455 or use our Online Contact Form to set up a free case evaluation with an insurance bad faith lawyer in Missouri.

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