Insurance is meant to offer peace of mind. Whether it’s auto insurance, home, health insurance, or life insurance, policyholders rely on their insurers to provide financial protection when unexpected events occur. However, when an insurance company fails to uphold its responsibilities under a contract, it may be acting in bad faith. Understanding what constitutes insurance bad faith is essential if you believe your insurance claim was unfairly denied, delayed, or mishandled.
What Is Insurance Bad Faith?
Bad faith insurance occurs when an insurance provider intentionally avoids fulfilling its contractual duties to a policyholder. This may involve a wrongful denial of a valid claim, delays in payment, a failure to conduct a proper investigation, or lowball settlement offers. An insurance contract is a binding agreement, and both parties,the insurer and the insured,are expected to act in good faith, avoiding bad faith conduct.
When insurance carriers engage in unfair claims practices acts, they breach the legal duty to handle legitimate claims with fair treatment, within a reasonable time, and up to the policy limits. Violating this trust can result in a bad faith lawsuit, including claims for compensatory damages, contractual damages, and emotional distress.
Common Examples of Insurance Bad Faith
Here are several real-world actions that may qualify as bad faith actions:
- Unreasonable Denial of a Valid Claim
An insurer may deny a first-party bad faith claim or a third-party bad faith case without a proper investigation, using insurance company tactics to misinterpret policy terms or invent deceptive practices. - Unreasonable Delays in Payment
Delays in payment without just cause, especially those not complying with insurance law or insurance code, may indicate bad faith behavior, also known as undue delays. - Failure to Investigate Properly
Ignoring evidence or conducting inadequate investigations into claims for insurance,including automobile insurance and disability insurance,demonstrates a failure in the claims investigation process. - Offering Lowball Settlements
Lowball offers are designed to take advantage of financial hardships, including medical expenses, property damages, and financial strain, resulting in financial losses for injury victims and accident victims.
Legal Remedies and Damages in a Bad Faith Insurance Claim
Victims of bad faith insurance practices can pursue legal action through experienced bad faith insurance attorneys. A successful bad faith insurance lawsuit may lead to recovery of:
- Compensatory damages
- Consequential damages
- Attorney fees and defense costs
- Emotional distress and mental anguish
- Additional damages for bad faith conduct or breach of contract
- Bad faith damages, broader damages, and basic damages depending on the jurisdiction
At Ted Law Firm, our experienced attorneys understand the crucial role we play in helping clients fight for a fair settlement, a favorable outcome, and justice. We know the insurance industry inside and out,including types of insurance, type of contract, and insurance policy coverage,to identify when an insurer has acted in bad faith.
When Should You Contact a Bad Faith Insurance Lawyer?
If you’ve encountered unreasonable claim denials, delays in payment, or claims without investigation, you should immediately reach out for legal representation. A bad faith insurance lawyer can explain your rights under bad faith laws, walk you through your legal claim, and help recover damages for breach of contract damages.
Even during difficult times, you don’t have to face the insurance company alone. Our law firm is committed to protecting your legal rights and pursuing legal recourse for clients harmed by bad faith tactics and dishonest practices.
Struggling after an accident or facing legal uncertainty? Ted Law Firm is here to guide you,every step of the way. We offer compassionate support and clear legal direction. Serving clients across South Carolina and Georgia.
We are proud to serve individuals and families across Charleston, Greenville, Columbia, Myrtle Beach, and Atlanta,providing dedicated legal support throughout South Carolina and Georgia. When life takes an unexpected turn, you can rely on us for trusted guidance and steadfast representation. Contact us today for your free, no-obligation consultation.
Attorney Ted Sink, founder of The Ted Law Firm, is a Yale, Stanford Business School, and Charleston School of Law graduate and former marketing executive who built a 7-figure law practice, earning millions for his clients. With experience in both law and advertising, Ted has been recognized in Forbes, Entrepreneur, and the ABA Journal. He speaks at industry conferences on marketing and law firm management, sharing insights from his unique background to help other firms grow. When not working, Ted enjoys traveling, diving, and dog-sitting golden retrievers.
