Are you facing issues with your insurer — be it suspicious claim denials or outright bad faith practices? Rest assured, you have rights under Canada’s insurance laws. Managing insurance bad faith claims in Alberta is not just about policy terms or premiums — it is about protecting those rights, your evidence, and your future.
If you notice any of the “bad faith” warning signs discussed in this article, contact Grover Law Firm right away. We know that many insurance policyholders face challenges when their policy or contract is not honored.
We can help you assess whether your insurer’s practices constitute bad faith. Contact us today to schedule a free consultation.
Calgary Bad Faith Insurance Lawsuit
Your insurance policy and insurance contract are the foundation of your relationship with your insurer. Every insurance company you deal with must abide by the duty of utmost good faith in every insurance contract. Alberta’s Insurance Act and Industry Councils’ codes of conduct mandate that policy language must be clear and that both the insured and the insurer act in good faith.
When you review your insurance policy, pay close attention to the insurance coverage provided, the terms outlined in the insurance contract, and any coverage issues that might arise.
Many policyholders overlook the fine print in their insurance policies. If you encounter coverage issues or experience claim denials, consulting a knowledgeable insurance lawyer can provide the advice needed to interpret your insurance contract accurately.
The duty of good faith is central to the Insurance Act, and any deviation from this standard is taken very seriously by courts in Canada.
Recognizing Bad Faith Insurance Practices
Admittedly, there are valid reasons why insurance claims can be denied, such as:
- Policy exclusions
- Lapsed policies
- Lack of adequate documentation to support the claim
- Incomplete or incorrect information in the claim submission
- Lack of necessity — For health-related claims, if the insurer deems the treatment medically unnecessary, the claim may be denied
- Claims for treatments considered experimental or not widely accepted
- Failure to take reasonable steps to prevent further damage after a loss
However, bad faith practices occur when insurers act in a way that is contrary to the principles of good faith and fair dealing. How can you spot potential bad faith issues and take legal action if your insurer’s conduct falls short of acceptable standards? Consider some clues that an insurance company is acting in bad faith.
Unreasonable delays in claim processing
The timely processing of claims is a fundamental obligation of insurance companies. However, some insurers may intentionally delay the processing of claims to avoid or postpone payment.
These delays can manifest as prolonged investigations without clear reasons, repeated requests for unnecessary documentation, or simply a lack of communication regarding the status of the claim.
Inadequate or misleading communication
Effective and transparent communication is vital in the insurer-policyholder relationship.
Bad faith practices regarding communication may include:
- Providing misleading information about coverage
- Failing to inform policyholders about essential aspects of their policies
- Neglecting to communicate critical decisions regarding claims
Failure to conduct a thorough investigation
Insurance companies have a duty to investigate claims thoroughly and fairly before making a decision. A failure to do so or conducting a superficial investigation can be a sign of bad faith.
This might involve ignoring pertinent evidence, failing to interview relevant witnesses, or overlooking certain aspects of the claim. Such negligence can lead to unjust claim denials or underpayments, adversely affecting the policyholder.
Lowball settlements or pressure to accept an offer
Offering settlements that are significantly lower than the actual value of the claim is another tactic that some insurers may employ in bad faith. This strategy aims to minimize the payout by undervaluing the policyholder’s loss.
Insurers hope that the policyholder will accept the inadequate offer due to financial pressure or lack of awareness about the claim’s true worth. If your insurer is urging you to accept a settlement offer immediately without giving you adequate time to review your options or consult a lawyer, this could be a tactic to minimize their payout.
Arbitrary Policy Cancellations or Modifications
Some insurers may attempt to cancel or modify a policy without proper justification or without providing adequate notice to the policyholder.
Such actions can leave insurance policyholders unexpectedly without coverage or with reduced benefits, especially when a claim is imminent or has already been filed. This practice is particularly sad as it undermines the very purpose of insurance, which is to provide security and peace of mind.
An insurer that shows little regard for the personal and financial hardships of their clients may be more focused on protecting their own interests than on honouring their contractual obligations.
Excessive Documentation Requests
While it’s reasonable for insurers to request documentation to support a claim, excessive or repetitive demands for information can be a tactic to delay or deny a claim unjustly.
This may involve asking for documents that are not relevant to the claim or requesting the same information multiple times.
Constant Denial or Refusal to Provide a Written Explanation
When an insurer denies a claim, they are obligated to provide a clear and specific explanation for the denial. A refusal to do so or providing a vague or generic reason can be indicative of bad faith.
Additionally, if the insurer constantly denies coverage for issues that are clearly included in your policy, it may indicate bad faith practices. For example, insurers may deny claims based on misinterpretations of the policy terms, incorrect application of policy exclusions, or unfounded accusations of fraud.
How to Handle Bad Faith Insurance Disputes
If you believe your insurer is acting in bad faith, follow these practical steps:
- Review your insurance policy: Examine your insurance policy and insurance contract carefully; look for any clauses in the policy language that may be used against you
- Gather evidence: Collect witness statements, police reports, and written reports
- Seek advice: Consult an experienced personal injury lawyer who can help you handle claims and resolve disputes by taking legal action if necessary
Many policyholders underestimate the power of thorough documentation. A well-organized file of communications and evidence can be the key to overcoming bad faith practices and resolving insurance disputes favorably.
Taking Legal Action Against Bad Faith Practices
Many individuals hesitate to challenge an insurance company due to fear of confrontation or the complexity of the claims process. However, when an insurer exhibits bad behavior and fails to honor the insurance contract, taking legal action not only supports your claim but also upholds the integrity of insurance law for all policyholders.
Insurance law in Alberta offers policyholders the ability to file complaints and pursue legal remedies against insurers who engage in bad behavior.
Depending on the nature of your concern, different regulatory bodies can assist you as follows:
- Concerns about insurance companies should be filed with the Alberta Superintendent of Insurance
- Concerns about specific insurance agents, brokers, or adjusters must be made with the Alberta Insurance Council (AIC)
- If regulatory intervention does not resolve the issue, your lawyer can file a lawsuit alleging bad faith practices. Successful claims may result in compensatory and — in certain cases — punitive damages
Your personal injury lawyer will help you review your insurance policy and insurance contract, gather evidence, and file the necessary legal documents.
Taking a Stand Against Bad Faith Insurance Practices With Grover Law Firm
At Grover Law Firm, we are committed to assisting clients with every aspect of insurance disputes. We handle claims like these every day.
We encourage you to consult our experienced team to learn more about how to handle claims and take legal action when denied claims occur. With our support, you can face insurance disputes confidently and move forward with the fair compensation that is rightfully yours.
Let our experienced team help you address bad faith practices, resolve insurance disputes, and ensure that your insurance claims are handled with the care they deserve. Reach out today to take the next step in protecting your rights and achieving fair compensation.