What does it mean if an insurance company acts in “bad faith”?
To understand bad faith by an insurance company, you need to know that an insurance policy is a contract between you and your insurance company. The contract requires that your insurance carrier act in good faith. This means that the insurer must always act fairly towards you and meet your reasonable expectations. The insurance carrier must also give more consideration to your financial interests than its own. When an insurance carrier fails to do this, it acts in bad faith. Examples include situations where an insurance company wrongfully denies or delays payment of a claim, unreasonably denies or withholds the payment of insurance benefits, uses unreasonable interpretations during the sale and solicitation of an insurance policy, or uses unfair methods of competition. The most likely reason is to save money which the company would otherwise have been obligated to pay. Insurance companies get away with this because many people who have been wrongfully denied payment of an insurance cl
