Although rare, sometimes insurance agents mislead consumers into thinking that their insurance covers more than it actually does. Insurers do this hoping that the insured will never have to make a claim. However, when the insured tries to make a claim on the insurance that they were fraudulently induced to buy, the insurer will often refuse full payment. If this happens, the insured will have several options which would include filing a complaint with Arizona’s Department of Insurance at http://www.id.state.az.us/forms/cad_complaint_form.pdf.

Arizona law allows an insured to bring a declaratory judgment action in court in order for a declaration as to whether the insurance company was legally bound to provide coverage for the harm the insured experienced. The downside of such actions is that they do not in and of themselves require any party to do anything and requires no compensation for damages; it just affirms what the parties’ true legal rights and obligations are.

The insured can also bring a claim for breach of contract. Winning a judgment based on breach of contract does allow an insured compensation for certain damages limited to the terms of the contract plus attorneys’ fees in the discretion of the court. Another strategy is to file a case based in the tort of insurance bad faith including a cause of action for misrepresentation or an insurance producer malpractice lawsuit which would allow for a much broader recovery of damages including compensation for general (pain, suffering, etc.) damages.

The decision as to whether either breach of contract or tort claims can be filed is complex and depends on the circumstances of each case. These claims may be brought forward for a wide variety of cases including: insurance agent or broker neglect, improper failure to pay claims, failure to settle within policy limits, intentional delay of payment, improper investigation of claims, and refusal to defend lawsuits.