Oklahoma, like many states I’m sure, has statutes which require insurance companies to settle claims in "good faith." I’ve made previous comments regarding the issue of good faith actions by insurance companies, but in this post, I’d like to discuss unfair settlement practices.
Unfortunately, some insurance companies opt to treat their insured individuals with disrespect when they report injury claims. Obviously, the main benefit to the insurance company is that they can save money when they deny coverage to injured individual. These denials most often occur in car wrecks or automobile accidents, but can happen in workers’ compensation claims, real estate or property disputes, or in health insurance claims.
The main trick for the the insurance company is to get notice of your claim for compensation, and then immediately or within a short period of time, deny compensation for on your claim based on any number of "policy exclusions." You’re then left without any recourse for paying your necessary and related expenses. The insurance company then continues to make money by forcing you to pay your premium for "coverage," without having to expend any of the necessary reserves.
At some point, this type of problem became such a business practice, that insurance companies denied claims to prevent payments. Around 1986, the Oklahoma legislature had seen enough pressure to enact the Unfair Claims Settlement Practices Act. The Act, which is codified at 36 O.S. § 1250.1, et. seq., is a strong weapon in the consumer protection artillery.
The Act applies if you make a claim for compensation based on your insurance coverage. It’s important to note that these protections do not apply if you’re seeking coverage from someone else’s insurance coverage. This makes sense, because someone shouldn’t have to pay for your claim, without a particular amount of scrutiny on the claim.
That said, violations of the Act happen if your insurance carrier breaks any of the legal rules (duh), or if you can show that your insurance company’s action are some sort of "general business practice." See 36 O.S. § 1250.3.
Generally then, there are 16 ways that your insurance carrier can violate the statute. These are enumerated in 36 O.S. § 1250.5 (the updated statute is here). I’m not going to state each one of them, except to say some of the more common violations are:
- Failing to fully disclose to first party claimants, benefits, coverages, or other provisions of any insurance policy or insurance contract when such benefits, coverages or other provisions are pertinent to a claim;
- Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages at issue;
- Except where there is a time limit specified in the policy, making statements, written or otherwise, which require a claimant to give written notice of loss or proof of loss within a specified time limit and which seek to relieve the company of its obligations if such a time limit is not complied with unless the failure to comply with such time limit prejudices an insurer’s rights;
- Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;
- Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language which releases an insurer or its insured from its total liability;
- Compelling, without just cause, policyholders to institute suits to recover amounts due under its insurance policies or insurance contracts by offering substantially less than the amounts ultimately recovered in suits brought by them, when such policyholders have made claims for amounts reasonably similar to the amounts ultimately recovered.
These are all fairly common ways that your insurance carrier may try to limit the amount of funds which you can get compensation for. Although very few individuals will have problems when they make their insurance claim, there are still a reasonable amount of people who face these problems. Unfair settlement is also a common problem when you deal with property replacement, such as your damaged vehicle.
The Oklahoma legislature has written some consumer protections for unfair auto settlements. I’m not going to discuss those, because they’re not as common of problems, but you can review them here.
If you’re having trouble getting compensation for your injuries, it’s important to speak with an attorney who can help you. It’s even more important that you speak with someone who can make sure your insurance company is acting responsibly, and in your best interests. Contact Absolute Legal Services, LLC, if you’d like to discuss your injury claim, or your insurance company’s behavior. You may email us at: contact@absolutelawfirm.com, or call our office at (405) 748-0318.