What is the difference between fraud and bad faith in insurance litigation cases?

Fraud and bad faith in insurance litigation cases are not the same thing, but they both involve a breach of the insurance contract between the insured and the insurer. Fraud in insurance cases refers to a deliberate attempt to deceive the insurance company by misrepresenting the facts of the claim. For example, an insured person may lie about the circumstances of their loss in order to get more money from the insurer. Bad faith is a more general term for an insurance company’s failure to honor the contract’s terms without any specific deception or malicious intent. Bad faith may occur if an insurer fails to investigate a claim thoroughly or fails to pay out despite clear evidence that the insured is entitled to a benefit. In Indiana, there are laws in place that prevent insurers from using bad faith tactics to deny or delay payment of an insurance claim. These laws allow an insured person to bring legal action against the insurer if they believe they have been treated unfairly.

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What is the difference between fraud and bad faith in insurance litigation cases?

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