Insurance Bad Faith FAQs

“Bad faith” refers to unreasonable or unfair conduct by an insurance company. An insurance policy is considered a contract between you (the Insured) and your insurance carrier (the Insurer). Bad faith insurance is any matter regarding an insurance claim by an Insured that is wrongfully denied by the Insurer. This contract requires that your Insurer acts in “good faith” toward you. When an Insurer unreasonably withholds the benefits of the policy from its Insured, it is considered to be in “bad faith.”

Yes. Insurers have the right to deny your claim if you have reneged on your end of the contract, or if the claim is fraudulent or not covered by the policy. Bad faith occurs when the insurance company’s conduct is egregious.

If the Court finds the Insurer wrongfully denied your claim, you would be eligible to recover the benefits of the policy for the claim, and possibly consequential losses and damages suffered for emotional distress, lost income, and attorney fees. In some cases where the Insurer has exhibited flagrant, intentional and/or gross misconduct, punitive damages are awarded.

With the insurance company attempting to devalue your claim, it can often be difficult to gauge what a settlement should look like. While this is among the most common questions that our firm is asked, the frustrating answer is, it depends. Accurately evaluating compensation for damages can be the most complicated part of the insurance claims process.

Often, as a case unfolds and additional information becomes available, the potential value of a claim can fluctuate. However, in the case of bad faith claims, victims can typically seek restitution for the initial damages as well as any resulting losses from the insurer’s actions.