What is an insurance company’s duty to act in good faith?

An insurance company’s duty to act in good faith is an important concept in Iowa insurance law. In general, it means that the insurance company must always act honestly and fairly towards policyholders when handling and settling claims. This means that the insurance company must always act in the best interest of the policyholder. Under Iowa law, insurance companies owe certain duties to policyholders, such as a duty of good faith and fair dealing. This means that the insurer must act fairly and honestly in all aspects of the insurance contract, including the handling of claims and the payment of claims. This includes being truthful with the policyholder, appropriately addressing their concerns in a timely manner, and not unreasonably delaying the payment of claims. Insurance companies must also act in accordance with the contract language, and if there is ambiguity in the policy language, it should be interpreted in the favor of the policyholder. The insurer must also act with reasonable diligence and promptly investigate and evaluate all elements of the claim. If an insurer fails to act in good faith, the policyholder may be entitled to punitive damages, which are awarded in order to punish the insurer for its wrongful behavior. In sum, an insurer’s duty to act in good faith is an important legal concept in Iowa, and it requires an insurance company to always act in the best interests of the policyholder.

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What is an insurance company’s duty to act in good faith?

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