Most people buy insurance believing it will be there when they need it most. Whether it’s after a serious accident, a medical emergency, or property damage, policyholders expect their insurance company to step in and help. Unfortunately, that doesn’t always happen.
In many cases, insurance companies delay, deny, or undervalue valid claims—not because the claim is invalid, but because paying it would cut into their profits. When this happens, the insurer may be acting in bad faith, and South Dakota policyholders have legal rights when that line is crossed.
What “Bad Faith” Really Looks Like in the Real World
Bad faith insurance isn’t always obvious. It often shows up as a pattern of frustrating behavior that slowly wears policyholders down. Examples can include:
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Repeated requests for the same documents
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Long delays with no clear explanation
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Vague denial letters that don’t cite policy language
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Settlement offers that don’t come close to covering real losses
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Sudden silence after a claim is submitted
Many people assume this is just “how insurance works.” In reality, insurance companies have a legal duty to handle claims fairly and reasonably. When they don’t, their conduct may go beyond inconvenience and into actionable bad faith.
Why Bad Faith Issues Commonly Arise After Accidents
Bad faith disputes frequently arise after serious accidents, including car crashes, truck accidents, and motorcycle collisions. These claims often involve significant medical bills, time away from work, and long-term consequences—meaning the insurer has more incentive to minimize payouts.
In high-value injury claims, insurers may attempt to:
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Dispute the severity of injuries
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Blame pre-existing conditions
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Argue over fault even when liability is clear
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Push quick settlements before the full impact of the injury is known
These tactics are not accidental. They are part of a broader claims strategy designed to reduce exposure.
Why Policyholders Are at a Disadvantage Without Legal Help
Insurance companies handle claims every day. Most individuals do not. Adjusters and claims representatives are trained to protect the company—not to maximize your recovery.
Without legal guidance, policyholders may unknowingly:
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Accept settlements that waive future rights
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Miss critical deadlines
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Provide recorded statements that are later used against them
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Fail to document insurer misconduct properly
This imbalance is why bad faith insurance claims exist as a legal remedy—to level the playing field when insurers abuse their power.
When a Bad Faith Claim May Be an Option
Not every denied claim is bad faith. However, a claim may cross that line when an insurer:
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Lacks a reasonable basis for denial
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Fails to conduct a proper investigation
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Ignores clear evidence supporting coverage
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Misrepresents policy terms
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Refuses to explain its decisions
When these actions cause financial harm, additional legal remedies may be available beyond the original insurance claim itself.
How Legal Action Can Change the Conversation
Once an insurance company knows its conduct is being reviewed by an experienced attorney, the dynamic often changes. Proper legal pressure can force insurers to:
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Reevaluate denied claims
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Correct improper delays
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Reopen unfairly closed files
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Engage in meaningful settlement discussions
In some cases, litigation becomes necessary—not just to recover what was owed under the policy, but to address the broader harm caused by the insurer’s misconduct.
Learn More About Bad Faith Insurance Claims in Sioux Falls
Bad faith insurance cases are complex and fact-specific. If you suspect your insurer is treating you unfairly, it’s important to understand your rights before accepting a denial or settlement.
For a deeper explanation of how bad faith insurance claims work and how Northern Plains Justice helps policyholders across South Dakota, visit our main resource page:
https://northernplainsjustice.com/sioux-falls-bad-faith-insurance-lawyers/
Understanding your rights is the first step toward holding insurance companies accountable.
Frequently Asked Questions About Insurance Bad Faith in South Dakota
What is an insurance bad faith claim in South Dakota?
An insurance bad faith claim arises when an insurer unfairly denies, delays, or mishandles a valid claim without a reasonable basis. South Dakota law requires insurers to act fairly and honestly when evaluating claims.
How can I tell if my insurance company is acting in bad faith?
Common warning signs include unexplained delays, vague denial letters, repeated document requests, low settlement offers, or refusal to clearly explain coverage decisions.
Is a denied insurance claim automatically bad faith?
No. Insurance companies can deny claims for legitimate reasons. Bad faith occurs when the denial is unreasonable, unsupported by evidence, or the result of a failure to properly investigate.
What types of insurance claims can involve bad faith?
Bad faith can occur in auto insurance, property damage, health insurance, disability claims, and accident-related injury claims—especially when large payouts are involved.
Should I accept a settlement if I suspect bad faith?
You should be cautious. Accepting a settlement may waive your right to pursue additional compensation later. It’s often wise to understand your legal options before agreeing to any payout.
