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What is insurance bad faith?

March 2, 2017

Insurance bad faith is when an insurance company neglects to honor an insurance claim that falls within the terms of the policy. If the insurance company has no principled basis for its denial of the claim, it’s acting in bad faith.

When can an insurance company deny a claim?

An insurance company can reject a claim in good faith if it has grounds to do so. For example, if an auto insurance policyholder files a claim to cover the costs of his injuries when the policy only covers repairs, it is likely that the insurance company will reject the claim.

Why would an insurance company act in bad faith?

An insurance company may violate the terms of its own policies for any number of reasons. Whether it was the result of a processing error or of someone’s conscious decision to deny an otherwise valid claim, the tort remains the same: the insured party has grounds to sue.

There is a steep burden of proof to pursue an insurance bad faith claim. The evidence must be convincing in nature, and the plaintiff must prove that there is conscious wrongdoing on behalf of the insurer.

If you believe you have been wrongfully declined an insurance claim, let the Indianapolis insurance bad faith attorneys at WKW put their 30 years of practice to work. For a free consultation, call 317-920-6400 or 800.525.802 or submit an inquiry online.

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