Most Louisiana consumers are responsible enough to purchase insurance policies, but many fail to truly understand what those policies cover. Unfortunately, insurance is often seen as catch-all coverage that should pay out for any claim at any time. This thought process may lead some people to believe they were the victims of bad faith insurance despite their policy provider abiding by the law.
A bad faith insurance accusation typically claims that an insurer failed to fulfill its duties, which resulted in a loss to the policyholder. Some claims allege that the insurer never fully investigated the claim and therefore did not issue a payment. Others involve already-settled agreements against a policyholder, which his or her provider did not pay, or did not fully pay up to the individual's policy limit.
These claims often manifest in one of two types of lawsuits -- a tort or breach of contract. A tort is a civil wrongdoing that caused another party harm, and such cases might involve instances where individuals did not seek necessary medical care because of insurance refusal, and therefore suffered further injury. A breach of contract claim usually deals with insurers who are accused of failing to hold up their end of the bargain by denying covered claims.
It is not necessarily uncommon for policyholders to submit claims that fall outside the coverage of their policies. Indeed, many people in Louisiana have only a general idea of what their policies address. When their claims are denied they often feel irritated or even wronged, which may prompt them to take action. However, if an insurer's actions fell within the policyholder's listed coverage, then denying their claim is not an example of bad faith insurance.