What is a claim for bad faith?

A claim for bad faith is a legal action taken when an insurance company unfairly denies, delays, or underpays an insurance claim in bad faith. This can occur in a variety of ways, including when an insurance company unreasonably denies a valid claim, when they fail to investigate a claim adequately, when they don’t respond to a claim in a timely manner, or when they fail to treat a policyholder with good faith and fair dealing. In North Carolina, bad faith claims can be brought against insurance companies under the state’s Unfair and Deceptive Trade Practices Act. The act allows victims of bad faith insurance practices to receive four times their actual damages, plus attorney fees and court costs. Furthermore, under North Carolina’s punitive damages law, compensatory damages can be increased if the insurance company’s action amounted to gross negligence, fraud, or intentional misconduct. It is important to understand that even if you are not successful in recovering punitive damages, you may still be able to recover your losses under the Unfair and Deceptive Trade Practices Act.

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What is a claim for bad faith?

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