What is “Bad Faith?”
An insurance company is obligated to act with the best interest of the insured in mind. When an insurance company fails to act in an honest and fair way towards its policyholders and/or is deceitful, insurance bad faith is said to have occurred.
Situations in which Insurance Bad Faith can occur vary widely. Insurance Bad Faith may occur in conjunction with auto insurance, health insurance, uninsured/underinsured motorist insurance, life insurance, homeowners insurance, medical malpractice insurance, and disability insurance.
Insurance Bad Faith behavior includes:
- Failure to investigate a claim in a proper and reasonable manner
- Withholding benefits without cause
- Delaying payment of claims for an unreasonable length of time
- Denying coverage
- Denying payment on claims
- Underpaying claims
- Undervaluing a claim
- Unfairly refusing to settle and/or reimburse claims
- The abusive or unreasonable claims process
- Cancellation of insurance policy unjustly