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