FAQs

Although there are many legitimate reasons your claim may have been denied, we work with clients who believe their case was unjustly denied, which is called bad faith insurance. If you believe your claim may have been denied unjustly, your insurance provider keeps delaying your payment, or the offer they gave you does not cover your damages, call MGW today so we can review your case.

Bad faith insurance refers to an insurance company’s attempt to renege on its obligations to its clients, either through refusal to pay a policyholder’s legitimate claim or investigate and process a policyholder’s claim within a reasonable period. Insurance companies act in bad faith when they misrepresent an insurance contract’s language to the policyholder to avoid paying a claim.

There are many ways in which an insurance company may act in bad faith. If a policyholder suspects bad faith, they should reach out to MGW immediately.

If an insurer is found to have committed bad faith, it is responsible for all of the consequences of those actions. Depending on the situation, this can include the waiver of any right to further challenge the claim, the payment of the policyholder’s attorney fees, and punitive damages. Insurers do not enjoy paying policyholders and their lawyers these sorts of damages and attorneys representing policyholders need to understand that these types of recoveries will not come without a fight.

Delay for the purposes of delay is perhaps the most frustrating example of insurance bad faith. Generally when first-party claims are made, the insured has some significant problem, be it a damaged house, wrecked car, temporarily closed business, or other “loss.”

Wisconsin Statutes section 628.46 (timely payment of claims) provides that an insurer “shall promptly pay every insurance claim” once written notice of a covered loss and the amount of the loss have been provided to the insurer. “Promptly” means 30 days. While some claims are complicated and may require some additional time for analysis, insurance companies often do not demonstrate a sense of urgency that the 30-day deadline to pay is approaching. It is easier to ask forgiveness than permission, especially when the only statutory penalty is a relatively low interest rate, but the refusal to comply with clear law on the subject can be bad faith.

“Lowballing” is a common tactic. Instead of doing an objective evaluation of a claim and paying the insured what is owed, the insurance company will initially offer a much lower amount and see whether the insured will accept the offer. The insurance company’s obligation to the insured is not to see how small of an amount the insured will accept to walk away from an insurance claim; the insurer is supposed to figure out what the property is worth and then pay that amount. This is not supposed to be a negotiation.

A proof of loss is a document typically filled out by the insured (you) to substantiate the value of the loss. It is typically one page, although it can be more depending on the claim, and will include the value of your loss and may include supporting documentation such as estimates for the damage you are claiming. Contrary to what insurance companies tell you, you do not need to fill out their proof of loss form. What matters is that you provide the insurance company proof that a loss occurs. They put unnecessary barriers between you and the money you are owed under the insurance policy by making you fill out a proof of loss and when you do not fill out the proof of loss, they claim you cannot get any insurance benefits. That is not true. Be careful in signing a proof of loss as signing the proof of loss may be considered an admission that you agree with the amount the insurance company is offering you. If you do not agree with the proof of loss, do not sign it.