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

In Washington, insurance litigation cases often involve an insurer’s liability for bad faith and breach of contract. In general, bad faith is when an insurer fails to act in good faith and fair dealing in relation to fulfilling their obligations to the insured. Breach of contract, on the other hand, is when an insurer fails to fulfill the terms and conditions laid out in the policy contract. Bad faith is usually a tort-based claim and seeks damages beyond what is provided in the policy. This means that if an insurer acts in bad faith, the policyholder can potentially be awarded additional damages. Breach of contract, on the other hand, is a contractual claim and seeks only to recover what is provided in the policy. Bad faith can be difficult to prove, as it requires that the insurer engaged in unethical or unfair business practices, such as failing to thoroughly investigate a claim or denying a legitimate claim. In contrast, breach of contract does not require that the insurer took any unethical or unfair actions, but merely that the policy was not fulfilled as stated in the policy contract. Overall, the difference between bad faith and breach of contract in insurance litigation cases is that bad faith requires the insurer to have acted unethically or unfairly, while breach of contract requires that the insurer simply failed to fulfill the terms of the policy as stated in the policy.

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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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