Understanding Bad Faith Insurance Practices in Wisconsin
“Bad faith” is likely a term you haven’t heard before, but it’s a common practice by insurance companies that every policyholder should know about.
What are bad faith insurance practices?
Bad faith can be defined as your insurance company not living up to their contractual obligation, either through refusing to pay a policyholder’s legitimate claim, delaying the process of paying for an unreasonable period, or offering a payout that misrepresents the insurance policy.
Bad faith can refer to any type of insurance policy for residents and commercial businesses including homeowners’ insurance, health insurance, auto insurance, life insurance, and travel insurance.
Why do bad faith insurance practices happen?
When you purchase an insurance policy, you are entering into a contract with the assumption that your insurance company will act in good faith to uphold their end of the contract should the time arise when you need to file a claim. When you pay your premiums on time, file your claim in a timely manner, and generally follow the rules, you expect your insurance company to also play by the rules. But when they don’t, it’s called bad faith and you may be able to file a case.
How do Wisconsin laws protect me against bad faith insurance practices?
Each state has its own set of laws, also called unfair claims practices acts, to protect its residents and businesses from unethical insurance practices. MGW Law is at the forefront of fighting to strengthen the protections of Wisconsin residents by submitting written testimony and attending public hearing such as our recent appearance in front of the Wisconsin Senate to oppose Bill 434.
The Elements of Bad Faith in Wisconsin put the obligation on the insured individual (plaintiff) to prove the following in order to establish a legal claim of bad faith insurance (Anderson v. Continental Ins. Co., 85 Wis.2d 675, 691 (1978)).
- • The absence of a reasonable basis for the insurance company’s denial of benefits; and
- • The insurance company’s knowledge or reckless disregard for the lack of a reasonable basis for denying the claim.
What can I do about a bad faith claim?
If you suspect bad faith practices by your insurance company and are dealing with a delayed, underpaid, or denied claim, contact MGW Law today so we can review your case immediately. Wisconsin Insurance claim law is MGW’s entire focus and we help clients every day get the settlements they deserve.