South Dakota law requires insurance companies to treat policyholders fairly. However, sometimes insurers act in bad faith by failing to handle your claim fairly. If it felt like your insurance company was working against you, you may have experienced it. Below are some common examples of these practices.
Unnecessary delays in processing your claim
South Dakota courts expect insurers to act promptly. Thus, insurance companies must process claims efficiently. If your provider takes weeks or months to return your calls, that is a red flag. Endless paperwork or needless delays may also signal bad faith.
Failure to investigate your claim
Insurers must investigate a claim before making a decision. If they deny your claim without reviewing the damage, that is a problem. Failing to speak to witnesses or check records means they are not doing their job. Some ignore important facts or cherry-pick information to justify a denial. That is also considered bad faith.
Unreasonable or unfair denials
This is one of the most serious signs of bad faith. If your policy covers your loss — like a fire, storm damage or medical procedure, the company must honor it. If they deny the claim anyway, they may be breaking the law.
Some insurers argue that an exclusion applies even when it does not. Others use vague language to confuse you or hope you give up. In South Dakota, courts check if the insurer had a valid reason to deny the claim. They also look at whether the company explained the reason clearly.
Offering a lowball settlement
Another red flag is when the insurer offers a settlement far below the actual cost of your loss. They may ignore current repair prices or undervalue your injuries. Some pressure you to accept a quick payout before you fully understand your damages.
If something does not feel right, it is a good idea to consult with a lawyer. A local attorney can explain your options and help you hold the insurer accountable.