Bad Faith Claims

Here are examples of bad-faith insurance practices:

Your insurance company should always give a reason when denying your valid claim. If your insurance company fails to provide a reason for denying your claim or denies your claim for an invalid reason, you may have a bad faith claim. For example, if you file a claim to reimburse your costs for repairing your automobile after an accident and your insurance company denies the claim without giving you a reason. You could file a bad-faith claim against your insurance company 

When an insurance company intentionally makes a “lowball” offer to you as a policyholder, your insurance company is acting in bad faith. For example, if you file a valid claim after an automobile accident and, in your policy, your uninsured motorist limit is $5,000. Still, your insurance company only offers to pay $2,500 for reasonable and necessary medical bills. This would be a bad-faith claim.  

When you buy insurance, you enter into a contract with your insurance company. If your insurance company fails to fulfill its obligations to you, the policyholder, it may be held liable for a bad faith breach of the insurance contract.

For example, if your homeowner’s insurance policy covers damages caused by a hurricane or tornado, but your insurance company refuses to pay the valid claim, the insurance company may be acting in bad faith.  

If your insurance company unreasonably delays or denies your claim, you may have a claim for bad faith. For example, suppose you submit a valid request for approval for surgery after your doctors deem it necessary. In that case, your insurance company has a duty to act on that request within a reasonable amount of time. 

 If your insurance company has failed to pay your valid claim promptly, you should consult a bad-faith insurance lawyer to discuss your rights.

If you ask your insurance company for documentation to support their decision, they must promptly comply with your request. 

As part of the duty of good faith and fair dealing, insurance companies must be truthful in their statements about the law and your policy. Suppose your insurance company intentionally misrepresents the law or language in your insurance policy and has denied a valid claim based on this misrepresentation. In that case, you may have a bad faith claim.

Disclaimer: Information provided on this site is NOT formal legal advice. It is generic legal information. Under no circumstances should the information on this site be relied upon when deciding the proper course of legal action.