If you have an insurance policy, you expect that your claim will be paid. However, sometimes, insurers act in bad faith, meaning they are unfair or dishonest when reviewing your claim, investigating it and deciding whether to pay it.
Insurance companies are supposed to act in good faith and fair dealing and if they breach this duty, you may be entitled to damages.
Bad faith overview
There are several examples of when an insurance company acts in bad faith. These include denying a claim without a valid reason, an intentional delay with claims processing, or failing to fully or fairly investigate a claim before deciding the outcome.
The insurance company may also offer you a settlement that is significantly less than what the policy coverage allows. If the insurance company provides you with false information about your coverage, that may also be acting in bad faith.
Damages
If you can demonstrate that the insurance company acted in bad faith, you may be entitled to damages, which may vary, depending on the type of claim.
You may be able to pursue the amount of the claim that was underpaid, delayed or incorrectly denied, the actual financial losses you suffered, and expenses you paid out of pocket.
If you had to pay additional expenses due to the insurer’s misconduct, like paying for temporary housing, replacing clothing or other goods, for example, you may be able to recover compensation for those as well.
Under some circumstances, you may also be able to recover damages for emotional distress.