Louisiana is home to some of the highest car insurance premiums in the country, with rates in New Orleans reaching as high as $4,234. With premiums as high as they are, drivers expect to be covered by their insurance companies in the event of an accident, but that is not always the case. Even though insured drivers are paying a pretty penny, car insurance companies are still profit-seeking businesses.
How Do Insurance Companies Make Money?
Insurance companies make money in various ways. They may collect premiums from policyholders, invest those premiums in a variety of securities, and use the earnings from those investments to cover claims. They may also use reinsurance, which is insurance that an insurance company purchases from another insurance company, to spread out their risk. In addition, insurance companies may earn income from fees charged for services such as policy administration and claims processing. Ultimately, the goal of an insurance company is to bring in more money in premiums and investment income than it pays out in claims, allowing it to stay in business and continue to provide coverage for its policyholders.
What is Insurance Bad Faith?
Insurance companies have a duty of good faith and fair dealing when handling claims brought by their policyholders. This means that the insurer must investigate and evaluate the claim in a reasonable manner and pay any benefits that are due. If an insurance company fails to do this, it is referred to as “insurance bad faith.” Some common examples of bad faith include refusing to pay a valid claim, delaying payment of a claim, or offering an unreasonably low settlement. Policyholders who believe that their insurer has acted in bad faith can file a lawsuit seeking compensation for their losses. In some cases, punitive damages may also be available.
Denying Your Claims
The main takeaway from the above section is this: insurance companies make money by spending as little as possible. Some tactics that insurance companies may use include:
- Claiming that the policyholder was at fault for the accident.
- Claiming that the policyholder did not have adequate coverage.
- Claiming that the policyholder did not provide sufficient documentation.
- Claiming that the policyholder made a false or misleading statement.
Supporting Your Case
If a claim gets denied by an auto insurance company, there are some steps that drivers can take to gather evidence to support their case and get the coverage they deserve.
- Drivers can review their policy and make sure they understand what is covered.
- Collect any documentation related to the accident, including photos, police reports, and eyewitnesses.
- Get an estimate of the damages from a qualified repair shop.
Once sufficient evidence is collected, it is recommended to speak with a car accident and insurance bad faith attorney. An experienced attorney will know how to investigate the accident and collect evidence to support your claim. They will also be familiar with the ins and outs of insurance policies and can help drivers understand what coverages they are entitled to. In some cases, they may even be able to negotiate with the insurance companies to get a better settlement.
New Orleans Car Accident Attorneys
At The Voorhies Law Firm, we have a team of experienced attorneys who are familiar with the tactics insurance companies use to lowball settlements. We will gather evidence, build a strong case, and fight for the full compensation you are entitled to. If you have been in a car accident, don’t let the insurance company take advantage of you. Contact The Voorhies Law Firm today.
Call us today at (504) 875-2223 or fill out our form online for a free initial consultation.