What is a claim for bad faith?

A claim for bad faith in Tennessee is a legal claim made by an insured against an insurance company for unfairly denying or delaying a claim for benefits. Bad faith claims are especially common in the context of auto-accident and health insurance, but they can apply to any policy. To make a bad faith claim in Tennessee, the policyholder must prove that the insurer acted “maliciously, fraudulently, or in reckless disregard” of the insured’s rights. When an insurer denies an insured’s claim, it must provide the insured with the specific reason for the denial and the specific policy language that supports the denial. If an insurer has no reasonable basis for the denial of a claim, then it is possible that the insurer has acted in bad faith. In Tennessee law, an insurer has a duty to act fairly with its insureds and to consider their interests when making decisions about payments. If it fails to do this, then it is acting in bad faith. An insured who has been denied a claim for benefits in bad faith may be able to recover damages. These damages may include the full amount of the claim, attorneys’ fees and any other losses the insured has suffered due to the insurer’s actions. It is important for insureds in Tennessee to be aware of their rights and to know that if their claim is denied or delayed without a reasonable explanation, then they may have grounds for a bad faith claim.

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