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Why is it that when an insurance company is vying for your business, and of course your premium dollars, they claim to be “by your side” or “your good neighbor” or even the kind and generous “good hands people” but when the crisis hits and you are truly in your greatest moment of need they are no where to be found.

For the unfortunate residents of Gulfport, Mississippi who lost everything during last year’s hurricane season, I suppose I am preaching to the choir. The insurance industry is fighting tooth and nail utilizing virtually every defense they can muster in order NOT to pay any claims for damage resulting from this disaster. Thankfully, the Federal District Court ruled this week in the first 1000 claims that wind damage was covered “even if the wind damage occurred concurrently or in sequence with [ ] excluded water damage.” This ruling will open the door to many more claims to come, although it did not extend as far as many residents would have hoped.

The bottom line is that insurance companies draft the language of the contracts of insurance that they sell. There is no negotiating process with the insured but rather a one sided agreement that the consumer can take or leave. If the policy is purchased you can be assured that wherever possible, the contract language will be skewed to favor the insurance company. The upside is that the law recognizes where an insurance contract is ambiguous, it must be interpreted in favor of the insured and against the company.

When this occurs and the insurance company ignores the rights of the insured, it can constitute bad faith insurance practices exposing the insurance company to compensatory and punitive damages.

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