Insurance Bad Faith FAQs

Q. How do I prove bad faith?

A. You can show insurance "bad faith" by showing that the insurance company denied your claim for a reason not cited in the policy. Bad faith may also be established by showing that the insurance company failed to process the claim at all or that they acted recklessly and with disregard of your right.

Q. Is it bad faith if the insurance company offers less for my claim than I think it's worth?

A. Maybe. Intentionally offering less that a claim is worth could be bad faith. The insurance company has a duty to work with its customers in a fair manner and offer a reasonable settlement. Anything less may be considered bad faith.

Q. How do I challenge my insurance company's estimate for my damaged property?

A. Some insurance companies try to low-ball their insureds by offering settlement amounts for far less than the property is worth. It's a good idea to have an independent professional estimate the value to replace or repair your damaged property.

Q. My policy is hard to interpret. Do I have to agree with insurance company's interpretation?

A. No. If a policy can be interpreted in more than one way, you can file a lawsuit and have a judge interpret the policy language. If the language can be interpreted in more than one way, a judge will usually find that the insurance company must pay the claim.

Q. My insurance company terminated my disability benefits without reason, can I file a claim for bad faith?

A. Yes, if you think the insurance company is in error. In the meantime, do not stop paying your premiums because it will give them grounds to terminate your coverage.

Q. What if my insurance company doesn't follow the policy and pay my legitimate claim?

A. If the insurance company fails to pay your claim under the terms of the policy, then you may file a lawsuit for breach of contract and sue for the damages that should have been paid.

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