What is the difference between breach of contract and bad faith insurance claims?

The difference between breach of contract and bad faith insurance claims in Texas is an important concept for anyone with an insurance policy. Breach of contract is when an insurance company fails to live up to its contractual obligations as set forth in its policy. When an insurance company fails to provide the benefits or coverage specified in the policy, then the policyholder may have grounds to file a breach of contract claim. On the other hand, bad faith insurance claims arise when an insurance company fails to handle a claim in a fair and equitable manner. Examples of bad faith insurance claims include denying a valid claim without a reasonable basis, unreasonably delaying payment of a valid claim, or making a low settlement offer on a valid claim. In Texas, bad faith insurance claims are typically handled in civil court. In summary, breach of contract claims arise when an insurer fails to meet its contractual obligations. Bad faith insurance claims, on the other hand, arise when an insurer fails to handle a claim in a fair and equitable manner in spite of meeting its contractual obligations. In Texas, both breach of contract and bad faith insurance claims may be subject to legal action.

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What is the difference between breach of contract and bad faith insurance claims?

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