What is the difference between an insurer's liability for bad faith and breach of contract in insurance litigation cases?

The difference between an insurer’s liability for bad faith and breach of contract in insurance litigation cases relates to how the insurer acted in dealing with a claim. In California, an insurer is liable for breach of contract when they fail to provide the coverage the insured is due under the terms of the insurance policy. This means that the insurer did not provide the coverage promised to the insured. On the other hand, an insurer’s liability for bad faith arises when the insurer acts in bad faith in dealing with the claim. This is based on the legal concept of an implied covenant of good faith and fair dealing. An insurer acts in bad faith when they unreasonably delay or deny benefits that are due, when they engage in deceptive or unfair practices, or when they act in a way that lacks the utmost good faith and fairness to the insured. In terms of liability for either bad faith or breach of contract, the insurer must be found legally responsible for their wrongful conduct in order for the court to award damages. In either case, the insured should pursue legal action if the insurer refuses to fulfill their legal obligations.

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What is the difference between an insurer's liability for bad faith and breach of contract in insurance litigation cases?

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