National Reach, Personal Attention
Every insurance contract includes an implied covenant of good faith and fair dealing. This means the insurer must investigate claims promptly, evaluate them fairly, and either pay or deny them based on a reasonable interpretation of the policy. When an insurer breaches this duty, the policyholder may sue for bad faith.
Bad faith can take many forms: denying a claim without investigation, delaying payment without reason, offering far less than a claim is worth, misrepresenting policy terms, or threatening the policyholder. The key is whether the insurer's conduct was unreasonable under the circumstances.
Damages in bad faith cases can include the original policy benefits, emotional distress, attorney fees, and in cases of particularly egregious conduct, punitive damages. Many states have specific bad faith statutes that define the insurer's duties and available remedies.