After an accident, a storm, or a significant loss, most people expect their insurer to do what the policy promises. Often it does. But when a claim stalls or is denied without a clear reason, the process can feel designed to wear you down. Recognizing common insurance company delay tactics can help you tell a routine claims process from one that deserves a closer look. The Camden bad faith insurance attorneys at Savage, Royall & Sheheen, LLP, help policyholders make that distinction.
1. What Insurance Bad Faith Means in South Carolina
Insurers owe policyholders a duty to handle claims fairly. In Nichols v. State Farm Mutual Automobile Insurance Co. (1983), the South Carolina Supreme Court held that an insured who can show bad faith or unreasonable action by the insurer in processing a claim may bring a tort action. Put simply, insurance bad faith generally means denying, delaying, or underpaying a valid claim without a reasonable basis.
You may also have heard “deny, defend, depose.” The meaning, as critics use it, is a perceived pattern: deny the claim, defend that denial with the insurer’s resources if challenged, and depose the policyholder to raise the cost of continuing. Most claims are handled fairly, and one denial proves nothing on its own. The phrase is shorthand for the tactics below when they appear together.
2. Vague or Incomplete Denial Letters: A Red Flag
A denial should tell you what was decided and why. Be cautious about letters that cite “policy exclusions” without naming the provision, rely on boilerplate, or omit the facts behind the decision. Without specifics, you can’t evaluate the denial or respond to it. Ask for the exact policy language and the information relied upon, in writing.
3. Unreasonable Delays and Repeated Document Requests
Insurers are entitled to investigate, but the investigation shouldn’t be endless. Warning signs include requests for the same records more than once, new requests that appear only after earlier ones were answered, unreturned calls, and timelines that keep shifting. State law also addresses paperwork: if an insurer requires written proof of loss and doesn’t furnish the form within twenty days after notice of the loss, the claimant is treated as having complied by submitting written proof within the policy’s time limit under S.C. Code Ann. § 38-59-10. Keep a log of every request, with dates and names.
4. Lowball Settlement Offers Without Explanation
An opening offer well below your documented losses, with no explanation of how it was calculated, can be a way of testing whether you’ll accept less. South Carolina’s improper claim practices statute, S.C. Code Ann. § 38-59-20, includes not attempting in good faith to reach a prompt, fair, and equitable settlement once liability is reasonably clear. A fair offer should come with reasoning you can follow.
5. Misrepresenting Policy Terms or Coverage
Sometimes the problem is what the insurer says about the policy itself. Telling a policyholder that a covered loss is excluded, overstating an exclusion or deductible, or downplaying available coverage can discourage a valid claim. The same statute lists misrepresenting pertinent facts or policy provisions as an improper claim practice. Having an attorney review the policy is the best check.
6. Statutory vs. Common Law Bad Faith Claims in South Carolina
South Carolina addresses these problems in two main ways.
- Statutory. Section 38-59-20 lists improper claim practices, but only when committed without just cause and with such frequency as to indicate a general business practice. That language targets patterns and isn’t generally treated as giving an individual policyholder a separate lawsuit. Section 38-59-40 does allow a policyholder to recover reasonable attorney’s fees when an insurer refuses to pay a covered claim within ninety days after demand and a court finds the refusal was without reasonable cause or in bad faith. That remedy is tied to a breach of contract claim.
- Common law. Under Nichols, an insured may bring a tort claim for bad faith and recover consequential damages. If the insurer’s conduct was willful or in reckless disregard of the insured’s rights, punitive damages may also be available. Contract and bad faith claims are often pleaded together.
7. What to Do If You Suspect Insurance Bad Faith in Camden and Kershaw County
Keep a clear record:
- Save every letter, email, and note of phone calls, with dates and names.
- Ask for denials and explanations in writing.
- Provide requested documents promptly, and keep copies.
- Hold off on signing releases or accepting a payment described as final until you understand what you’re giving up.
- Consider a complaint to the South Carolina Department of Insurance, and speak with an attorney before deadlines pass.
Insurance companies have substantial resources, and judging whether a claim was handled fairly takes experience. Savage, Royall & Sheheen, LLP, has served individuals, businesses, and local governments for nearly a century in the zip code 29020, and our attorneys are prepared to review even the most complex coverage disputes. In Lancaster, Kershaw, Chester, or elsewhere in South Carolina, request a consultation with our Camden office at 803-590-0516. Contact us today!