What to do When an Insurance Company Breaches its Contract
By Lala C. Ballatan |
Seldom do we understand some of the mumbo jumbo in policy statements and
contracts insurance policies that we avail of. However, the insurance law
regularly provides that should there be a vagueness or uncertainty in a policy,
whether in the choice of words or meaning, should be resolved favoring the
policyholder and against the insurer. But if there’s no unclear content in the
coverage and the policy is clear and explicit, the clear meaning will be
enforced.
Judges and courts interpretation of insurance contracts largely
depend on what the clients’ objective expectations are of the policy,
reasonably. But personal expectations of the policy holder and are not
reasonably supported by the contents of the contract is unenforceable.
The term “limits” refers to the amount of insurance coverage. It is
ruled that exceptions and limitations in a policy must be explained clearly in a
language that’s understandable for all. This is so in order that there will
never be denials of coverage. As such, insurance policy’s exclusions and
limitations are always narrowly or strictly interpreted. Whenever there is a
muddle over multiple meanings of exclusions or limitations, the court has to
interfere to give the narrowest explanation.
So, why are we giving these
bits of details regarding insurance policies to you? Its’ because that we’d like
for you to know what to do if you, as a policyholder, have any lack of knowledge
or misunderstanding with regards to the insurance policy you’ve taken. Results
like loss of benefits or forfeiture of rights, loss of benefits. You must know
that as an insured, an insurer is required to bring to your attention some
relevant information. It will also enable you to take action and secure the
rights provided by the policy.
It is unfortunate that an insurance agent
is not obligated to advise a policyholder on the adequacy of the limits of
coverage selected by the policy holder. There are also other ways wherein
insurer can do a breach of contract or violated the covenant on good faith and
fair dealing. One of the situations wherein this act of bad faith happens is
when insurance policy has provisions that are extremely in favor only with the
company and when company used advertising and solicitation materials that are
unfair or deceptive.
If you find out that the insurer has committed
breach of contract and/or breached the covenant of good faith and fair dealing,
you can recover all damages caused by the breach. Damages may be in the form of
consequential losses, loss of use of the insurance proceeds, general damages,
attorney’s fees and punitive damages. If you’re recovering from emotional
distress and you may also recover damages for emotional distress.
In
filing a suit for a bad faith case, there’s a statute of limitations that vary
from state to state. In order that your case won’t be barred for trial, know the
duration period of the statute of limitations and be able to file on time.
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