It’s in an insurance company’s best interest to avoid making payouts to policyholders. To do so, they need to justify their reasons for denying claims. Many states have adopted laws to protect policyholders from wrongful and deceitful actions by insurers. These actions may include:
Damaged property being undervalued.
Arson allegations.
Not investigating on time.
Denying a claim despite supporting evidence.
Threatening to prosecute the insured to lower the payout.
Violating the terms of the policy.
Delaying valuation or payment of a claim by alleging that arson or fraud played a role in the fire.