What is a claim for bad faith?

A claim for bad faith is a legal action taken against an insurance company when that company fails to act in good faith during the handling of an insurance claim. In Hawaii, bad faith claims are recognized by the courts and a breach of duty of good faith can be seen as bad faith. Bad faith can take many forms including failing to investigate an insurance claim, denying a claim without a reasonable basis, delaying payments on claims without a legitimate reason, offering unreasonably low settlements, or violating state regulations or laws. When someone believes the insurance company has acted in bad faith, they can file a lawsuit asserting bad faith. In Hawaii, if a court finds that the insurance company acted inappropriately or did not act in good faith, the court may award the claimant damages. These damages may include the full amount of the insurance benefit due, plus interest, and an additional award for punitive damages. In Hawaii, claimants filing bad faith lawsuits must show clear and convincing evidence that the insurance company acted in bad faith. This is a higher bar to meet than in cases involving only breach of contract claims. If the claimant is successful, the court may order the insurance company to pay punitive damages in addition to the amount of the insurance claim. Bad faith claims can be complicated and require experienced attorneys to effectively argue the case. It is important for Hawaii residents to understand that they may be able to pursue a bad faith claim if they believe the insurance company acted inappropriately in handling their insurance claim.

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What is a claim for bad faith?

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