By law, your insurance company must act in good faith and deal fairly with you when you make a claim or when someone sues you for something your policy covers. Unfortunately, however, insurance companies sometimes fail to live up to this duty of care they owe their customers. In such a situation, you may have a bad faith claim against your insurance company.
FindLaw explains that you generally have two choices https://consumer.findlaw.com/insurance/elements-of-a-bad-faith-insurance-claim.html for your suit: sue under statutory law or sue under common law.
Statutory means that a specific law exists under which you can sue. Examples of a statutory bad faith insurance claim could include a suit for breach of contract, i.e., the insurance contract, or a suit for tortious conduct, i.e., deliberate wrongdoing, on the part of your insurance company.
Common law suits
Common law means that any written law arose out of custom and practices within the state or came about because of one or more court decisions. Common law bad faith insurance claims could include the following:
- The company misrepresented the provisions of your policy to you.
- It stalled in investigating or otherwise handling your claim.
- It stalled in processing your claim, failing to approve or deny it within a reasonable time frame.
- It did not adequately inform you of why it denied your claim.
- It undervalued your claim.
- It otherwise attempted to renege on its obligations to you.
You can also sue your insurance company for bad faith if it fails to adequately defend you in a personal injury lawsuit that someone brings against you.