Is My Insurance Company Not Acting in “Good Faith?”

An insurance company fails to act in good faith when its refusal to pay a claim, or the full value of a claim, is not reasonably justified.

The following factors are considered when determining whether an insurance company has acted in bad faith:

  • The probability of the insured's liability
  • The amount of the policy limits
  • The extent of the claimant's damages
  • The adequacy of the insurer's investigation
  • The adequacy of the defense provided by the insurer
  • Whether the insurer followed the defense attorney's advice regarding settlement
  • Whether the insurer heeded its own adjusters' advice regarding settlement
  • The insurer's willingness to engage in settlement negotiations
  • Whether the insured made any misrepresentations that may have misled the insurer in settlement negotiations
  • The openness of the communication between the insurer and the insured
  • Whether the insured kept the insured informed of settlement negotiations
  • Any other conduct demonstrating that the insurer felt or showed greater concern for its financial interest than it did for its insured's financial risk