All insurance companies are required to investigate, negotiate, and settle claims in good faith. When insurance companies violate this duty, they can be held liable in court for their bad faith acts. South Dakota recognized the right of those harmed by bad faith insurance tactics to bring a claim against the insurance company for its bad faith tactics.
Here are 3 examples of bad faith insurance tactics:
1. Denying A Claim For No Reason
When an insurance company denies a claim, it should give a reason. If you made a valid claim to the insurance company and it was denied for no reason or for an invalid reason, you may have a claim against the insurance company for bad faith.
2. Refusing To Pay A Valid Claim
If an insurance company is refusing to settle or pay a valid claim, it is likely acting in bad faith. If you filed a claim with an insurance company that was clearly covered, the insurance company may be liable for its bad faith denial.
3. Misrepresenting The Law Or Policy Language
If an insurance company has intentionally misrepresented the law or language in the insurance policy applicable to your case, you may have a legal claim against the insurance company for bad faith. Insurance companies must be honest and truthful in their statements about the law and the insurance policies involved in a claim.