Proving a Bad Faith Insurance Claim

When an insurance company fails to handle your claim fairly, you may have grounds to pursue a bad faith claim. Proving bad faith, however, requires strong evidence and a clear understanding of your rights.

Understand What Constitutes Bad Faith

Bad faith occurs when an insurer unreasonably denies, delays, or underpays a valid claim. Examples include failing to investigate properly, misrepresenting policy terms, or refusing to communicate. It is not enough that you simply disagree with the payout; you must show the insurer acted unfairly or in violation of the law.

Review Your Insurance Policy

Your policy is the foundation of your case. Carefully review the coverage, exclusions, and conditions to ensure your claim falls under its terms. If the insurer denies coverage for a reason not stated in the policy or interprets clauses unfairly, this may support a bad faith claim.

Gather Evidence of Unfair Practices

Documentation is essential. Keep copies of all claim-related communication, including emails, letters, and notes from phone calls. Record the timeline of your claim process—delays, ignored requests, or contradictory explanations may point to bad faith. Also, save any expert reports, estimates, or appraisals that support the value of your claim.

Compare Insurer Actions to Industry Standards

Insurance companies must follow state laws and industry standards when handling claims. If your insurer ignored deadlines, failed to investigate properly, or provided shifting reasons for denial, these actions may prove that they failed to act in good faith.

Consider Professional Support

Often, policyholders benefit from hiring a public adjuster, attorney, or other professionals who specialize in insurance disputes. These experts can help analyze your case, identify violations, and provide the leverage needed to hold the insurer accountable.

File a Complaint or Legal Action

If evidence shows bad faith, you can file a complaint with your state’s department of insurance. In more serious cases, you may file a lawsuit against the insurer. Courts may award not only the value of your claim but also additional damages for the insurer’s misconduct.