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Knowing when car insurance claim denials are in bad faith

Insurance companies are businesses with the purpose of making money. It is not unusual for an insurer to deny or undervalue a claim to avoid making a substantial payout. Still, Illinois drivers may seek the best deal on car insurance only to find the policy does not cover what they expected. While it may seem a claim denial is in bad faith, there may be other reasons why the insurer refused to pay.

The first action a policyholder should take after receiving a denial for a claim after an accident is to carefully review his or her possible role in the denial. Something as simple as missing a payment can quickly cancel the coverage, which may justify an insurer's decision to deny a claim. Perhaps the driver of the car was not on the insurance policy for the vehicle. Not all policies cover everyone to whom the owner turns over the keys.

Those who are not entirely truthful on their policy applications may end up with a claim denial and perhaps worse. An insurer who believes a policyholder committed fraud may cancel the policy altogether. It could also be that the policy does not cover the circumstances in which the accident occurred. A careful reading of the exclusions in one's policy may reveal dangerous gaps in coverage.

An Illinois policyholder who is fully covered on an up-to-date policy may still face a claim denial if he or she fails to provide enough documentation of the accident. However, an insurer may also use this as an excuse, requesting more and more information to complicate the case. This could be an act of bad faith, and the guidance of an attorney may be helpful in obtaining the benefits a policyholder deserves.

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