BAD FAITH AND INSURANCE FRAUD

Insurance fraud is a complex area of the law, and one that requires professional advice and help. At Abogados Central Legal, we have the expertise to help, with attorneys who specialise in insurance fraud and bad faith cases. These two areas of the law can be quite distinct, so here is a brief explanation.

Insurance Fraud

Insurance fraud can be committed by the claimant, or by the insurance company. There are different types of insurance fraud. Here are some of the more commonly seen instances:

Compensation Fraud

If someone fakes injury or illness in order to gain compensation from their company insurance policy, they are committing insurance fraud. This is not uncommon and at Abogados Central Legal, we have experience in dealing with compensation fraud cases.

Fee Churning

This involved the insurance representative misleading the client into opening a policy – or renewing one – that in fact presents no or little benefit to the insured. However, the representative still gets commissions from selling a policy they were aware was inappropriate.

Premium Diversion

A particularly troubling form of insurance fraud, premium diversion occurs when an insurance rep takes the money for a premium, and does not in fact set it up – but keeps the money. The client believes they are insured, but actually they have no cover – a situation that can be very problematic in the event of a claim. It can also involve unlicensed persons posing as insurance reps, and selling false premiums.

If you have been affected by any of the above, or suspect insurance fraud of another form, contact us at Abogados Central Legal and someone on our team will be happy to help.

Bad Faith

Acting in bad faith is a legal term used in court cases, and infers that an insurance company has deliberately misled a client, or not carried out contractual terms agreed to when they should have. Here is a little more detail on the subject.

First Party Claims

When the insured person makes a claim, for injury, damage or whatever the policy covers, this is a ‘first party’ claim. Insurance companies can be acting in bad faith if they:

  • Ignore the claim
  • Refuse to pay out on a valid claim
  • Undervalue the amount due
Third Party Claims

This sort of claim is found in liability insurance cases, where the insurer is expected – as agreed in the terms of the policy – to defend the insured against a lawsuit. Examples of acting in bad faith involve the insurer doing the following:

  • Refusing to adequately defend the client
  • Delaying the course of events
  • Not investigating thoroughly
  • Refusing to make a settlement
  • Unreasonable interpretation of the policy terms

As you can see, this is an area of the law that can be rather complex, so professional assistance is strongly advised.
If you believe you have a case of insurance fraud or bad faith, get in touch with us at Abogados Central Legal. We will arrange an appointment for you to discuss the situation and all of our attorneys are 100% fluent in Spanish.

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