What is an insurer's duty of good faith?

An insurer’s duty of good faith is a legal obligation that requires an insurance company to treat its policyholders fairly, honestly, and in good faith. It means that insurers must act in a manner consistent with the best interests of their policyholders. In Arizona, the duty of good faith requires that insurers: • Refrain from unreasonable delay in processing claims • Notify their policyholders of any possible issues that may affect their coverage • Proactively investigate and assess claims without waiting for the policyholder’s request • Provide clear, accurate, and timely claims information • Respond to the policyholder’s written requests in a timely manner • Assess and pay claims in a reasonable time frame • Notify policyholders when coverage may not be available • Act in a manner that is fair and honorable The insurer’s duty of good faith helps to protect policyholders from unfairly denied or delayed claims. It also ensures that consumers are treated fairly, honestly, and promptly by their insurance company. If an insurance company neglects their duty of good faith, the policyholder may be able to recover damages in a breach of contract case.

Related FAQs

What is a negligence claim?
What is the difference between a claim and a lawsuit?
What is a general liability insurance policy?
What is a contractual liability exclusion?
How do I understand an insurance policy?
What is a policy exclusion?
What is a duty to defend clause?
What are the benefits of filing an insurance claim?
How long does it take to process an insurance claim?
What is an assignment of rights?

What is an insurer's duty of good faith?

Related FAQs

Related Blog Posts