Insurance Bad Faith

Insurance bad faith occurs when an insurance company acts dishonestly or unfairly in handling a claim made by one of its policyholders.

This can include delaying or denying a claim unreasonably, failing to properly investigate or evaluate a claim, or even outright refusing to pay a claim that should be covered under the policy.

A policyholder may suspect bad faith when an insurance company offers an unreasonably low settlement, fails to communicate important information, or does not comply with legal requirements. Insurance bad faith puts policyholders in a vulnerable position, as they rely on the insurance company to properly assess claims and fulfill their contractual obligations.

Fortunately, those who have been the victims of insurance bad faith may have legal recourse. It may be possible to file a lawsuit against the insurance company for breach of contract or bad faith practices. By doing so, policyholders can potentially recover the compensation they deserve and help to hold insurance companies accountable for their actions.

The fraudulent deception of another person; the intentional or malicious refusal to perform some duty or contractual obligation.

Bad faith is not the same as prior judgment or Negligence. One can make an honest mistake about one’s own rights and duties, but when the rights of someone else are intentionally or maliciously infringed upon, such conduct demonstrates bad faith.

The existence of bad faith can minimize or nullify any claims that a person alleges in a lawsuit. Punitive Damages, attorney’s fees, or both may be awarded to a party who must defend himself or herself in an action brought in bad faith.

Bad faith is a term commonly used in the law of contracts and other commercial dealings, such as Commercial Paper, and in Secured Transactions. It is the opposite of Good Faith, the observance of reasonable standards of fair dealings in trade that is required of every merchant.

A government official who selectively enforces a nondiscriminatory law against the members of a particular group or race, thereby violating the Civil Rights of those individuals, is acting in bad faith.