Oregon Bad Faith Insurance Lawsuits

Portland, OROregon breach of insurance contract claims are not rare. Policyholders who have had their Oregon long term disability claim denied on unreasonable grounds may be able to file a lawsuit to have their claims reviewed.

Insurance policies are essentially a contract between the insurer and the policyholder. The agreement is that the policyholder pays premiums and the insurer agrees to cover the cost (up to certain limits) of events covered by the insurance policy. If the insurer fails to honor its end of the contract and does so unreasonably, the insurer could be sued for breach of insurance contract.

Not all claim denials are a breach of contract. An insurance company may have legitimate reasons for denying a claim. But if the insurance company has been intentionally dishonest in not approving a claim, if it has misrepresented its policies to get policyholders to buy its insurance policies or if it has drawn out the claims process by insisting on repeated, unnecessary paperwork being submitted, then the insurance company may have violated its insurance contract.

Furthermore, a complaint by one person against an insurance company can result in the discovery of widespread practices against thousands of policyholders. These can include improper claim handling procedures, purposely undervaluing claims or canceling insurance coverage after a claim is made.

Many insurance companies have faced lawsuits alleging they breached their contract or acted in bad faith. In 2010, MetLife faced a lawsuit, reported by LawyersandSettlements here, after it found that a policyholder who died in a car accident had committed suicide, despite officials concluding the death was an accident. Under the insurance policy, MetLife did not cover suicide. Eventually, the company settled and paid out the insurance policy.

Depending on the circumstances of an insurance policy, the policyholder or beneficiaries may have to file an appeal of an insurance claim before a lawsuit is filed. If the insurance policy is covered by ERISA, an appeal has to be filed within appropriate deadlines. If the policy is not covered by ERISA, then a lawsuit can be filed as soon as a claim denial is issued.

Insurance companies have an obligation to uphold their end of an insurance contract and deal fairly and reasonably with their policyholders. Failure to do so can result in a lawsuit being filed against the insurance company.