November 28th, 2007

"Insurance Companies Deny Claims To Katrina Victims"

After Hurricane Katrina left hundreds of thousands in Louisiana homeless, many turned to their insurance companies to cover their losses from the disaster. However, many homeowners found that whether or not they were backed by FEMA, they were still at risk for losing their coverage.

Legal Battles

Many companies, such as Allstate Insurance Co., have been through extensive legal battles with their policyholders, post-Hurricane Katrina. The consumers who believed that in the case of a natural disaster these companies would cover them are finding out the hard way that their claims are likely to be turned away and disputed.

Several insurance companies were also accused of bad faith during the California wildfires. When thousands of homes burned down in the 2003 wildfires throughout Southern California, many residents were left without homes and to much dismay, without insurance to cover their losses.

At the time, an estimated 200 lawsuits were filed against various companies claiming bad faith insurance. When the 2007 wildfires hit the west coast, locals once again fled from their homes and insurance companies must now respond to the claims.

Although state officials say that they don't have a specific number on the amount of insurance suits that have been filed, they speculate that several suits will be filed, though they estimate that the number will be less than in 2003.

Understanding Bad Faith Insurance

When an insurance company fails to pay a policyholder claim for no apparent reason, it is referred to as bad faith insurance . This type of insurance unfortunately happens to a great deal of consumers across the United States annually.

Bad faith insurance may also occur when an insurer takes the position that policyholder's claim goes against the insurance coverage policy and/or guidelines.

Consumer Rights

Although the laws relating to bad faith insurance are always changing, it is important to remember that as a policyholder you have rights. When a policyholder suspects an insurance company is acting in bad faith, he or she should always seek legal advice.

If you think you have a bad faith insurance claim, contact us today. We will put you in touch with an experienced attorney who can inform you of your legal rights and options free of charge.