Common Bad Faith Tactics by Insurance Companies in Homeowners Claims
Homeowners insurance is designed to provide peace of mind during disasters like storms, fires, or water damage, but what happens when your insurer uses bad faith tactics to avoid paying out? In Washington State, where events such as wildfires in Eastern Washington and heavy rains in the Puget Sound region frequently lead to claims, bad faith practices by insurers are a growing concern. According to recent reports, the Washington Office of the Insurance Commissioner (OIC) handles thousands of complaints each year, with many involving unfair denials and delays in homeowners claims. Under Washington's Insurance Fair Conduct Act (IFCA, RCW 48.30.015), insurers must act in good faith, and violations can result in treble damages, attorney fees, and more. As an attorney for plaintiffs specializing in bad faith insurance cases across Washington—from Seattle to Spokane—we've helped homeowners fight back against these tactics. This guide details the most common bad faith strategies used by insurers in homeowners claims, how to spot them, and your rights under state law.
Top Bad Faith Tactics in Washington Homeowners Insurance Claims
Insurers in Washington are required to investigate claims promptly, communicate clearly, and pay valid claims without unreasonable delays. However, bad faith occurs when they breach this duty, often to minimize payouts. Here are the most prevalent tactics, drawn from state regulations, court cases, and consumer complaints:
Unreasonable Delays in Processing or Paying Claims: one of the most frustrating tactics is dragging out the claims process. Insurers might take months to inspect damage, request endless documentation, or simply ignore follow-ups, hoping you'll give up. In Washington, regulations under WAC 284-30-330 require insurers to affirm or deny coverage within a reasonable time—typically 30 days for decisions. Delays violate IFCA and can lead to bad faith claims. For homeowners, this often appears in storm damage claims, where temporary repairs become permanent burdens due to insurer stalling.
Failure to Properly Investigate the Claim: insurers have a duty to thoroughly investigate, but bad faith arises when they conduct superficial reviews or ignore evidence. This might include not hiring qualified adjusters, dismissing expert reports, or failing to inspect the property promptly. Washington law mandates a complete investigation, and shortcuts can result in lawsuits. In homeowners scenarios, this tactic is common in water damage claims, where insurers blame "gradual leaks" without evidence, denying coverage for mold or structural issues.
Unjustified or Unreasonable Claim Denials: denying a valid claim without a legitimate reason is a classic bad faith move. Insurers might cite ambiguous policy exclusions—like for "earth movement" in landslide cases—or misinterpret terms to their advantage. Washington courts interpret ambiguities against the insurer. Homeowners often face this in flood-related denials, even with endorsements, leading to OIC complaints and potential treble damages under IFCA.
Offering Lowball Settlements Far Below Fair Value: insurers may pressure you into accepting undervalued offers, claiming it's the "maximum" under your policy. This includes depreciating repairs unfairly or ignoring additional living expenses during displacement. In Washington, such tactics breach the duty of good faith. For fire-damaged homes, this might mean settling for cosmetic fixes while structural issues persist.
Misrepresentation of Policy Terms or Coverage: deceptive practices, like misstating what your policy covers or hiding exclusions, erode trust. Insurers might claim "wear and tear" for sudden damage or fail to disclose renewal changes. Washington's Consumer Protection Act and IFCA prohibit this, allowing recovery beyond policy limits. This tactic hits hard in vacancy-related denials for second homes in rural Washington areas.
Persistent Lack of Communication: ignoring calls, emails, or requests for updates is a subtle but effective bad faith strategy. Without clear explanations, you're left in limbo. State law requires prompt communication, and violations support bad faith claims. Homeowners dealing with theft claims often experience this, prolonging recovery.
Requiring Excessive or Arbitrary Proof of Loss: demanding unnecessary documents or appraisals can be abusive. While some proof is needed, overreach violates fairness duties. Washington cases emphasize reasonableness, and tactics like this have been called out by Washington courts. In property damage from windstorms, this delays urgent repairs.
Failing to Defend or Represent Your Interests Fairly: though more common in liability, homeowners policies include defense for certain suits (e.g., guest injuries). Refusing without cause is bad faith.
Recognizing Bad Faith Under Washington Law
Bad faith is a breach of the implied covenant of good faith and fair dealing, actionable under common law and IFCA. Signs include any unreasonable action causing harm. Successful claims can yield policy benefits plus extras like emotional distress damages.
What to Do If You Suspect Bad Faith in Your Homeowners Claim
Document everything and consider retaining an insurance bad faith attorney to help you navigate the process who can send an IFCA notice for you and attempt to prove the denial was unreasonable and recover damages for you.
Fight Back: Contact a Washington Bad Faith Insurance Lawyer Today
Don't let bad faith tactics leave you vulnerable. At Hogue Law Firm, we hold insurers accountable under Washington laws. Schedule a free consultation—call 509-934-1998 or use our online form.