Small-business owners and entrepreneurs in California are often affected by insurance companies that act in bad faith as a strategy to avoid paying a claim.

In general, insurance companies are usually far more eager to accept payments than to make them. After diligently paying your insurance premiums, you have a legitimate claim — but you feel like you’re getting nowhere with the insurance company. Is this normal, or is your insurance company acting in bad faith?

Red flags that could be a sign of bad-faith tactics by your insurance company

“Bad faith” by an insurance company is generally defined as having unfair practices that are based on dishonesty. The following are some red flags to look out for  as your claim proceeds:

1. Refusal to pay: Insurance companies have a legal obligation to use fair claims practices. If a claim is valid, the insurance company cannot refuse to pay. Denying your claim without a valid reason — or denying your claim in disregard to the facts — could be an act of bad faith.
2. Threats: Insurance companies are not allowed to make threats. For example, subtle (or not-so-subtle) hints that your insurance will be canceled for making a claim could be considered an act of bad faith.
3. Deceptive practices: There are many ways that an insurance company could compromise the claims process. For example, not notifying the claimant about deadlines or lying about the extent of their coverage are both deceptive.
4. Unreasonable delays: When an insurance company intentionally delays the claim process, often by switching a claim from one adjuster to another adjuster without good reason, that’s often deliberate.
5. Low-balling: When an insurance company tries to pay less than what the policyholder is entitled to, it can be a red flag that bad faith could be involved. 

There is a whole array of tactics used by insurance companies to avoid paying a claim or paying less than what is due.  When going against an insurance company over a bad-faith claim , it can feel like a David and Goliath scenario — but you don’t have to go at it alone.