A couple of weeks ago I wrote a blog post describing how policyholders are unable to enforce insurance adjuster breaches in good faith for actions such as failing to acknowledge communications or failing to affirm or deny coverage within a reasonable time after a proof of loss.1 The post articulated that such enforcement ability resides solely with the insurance commissioner, pursuant to T.C.A. § 56-8-101(c).2 This restriction is quite vexing when policyholders call me asking for help after insurance adjusters behave badly, but I am unable to help them directly address their poor treatment.
Continue Reading Tennessee Bad Faith Claims: Is a Statutory Good Faith Breach Available for Tennessee Policyholders – Part II

Missouri does not recognize a common law right to bring an action for the breach of the conversant of good faith and fair dealing for a first party property insurance claim. Instead, Missouri statutory law allows policyholders the right to hold insurance companies accountable for their “vexatious” refusal to pay.
Continue Reading Missouri Bad Faith Law—Understanding Missouri’s Vexatious Refusal to Pay Law

Insurance carriers have a duty to act in good faith and not engage in unfair claims practices. The Tennessee legislature has promulgated this duty in T.C.A. § 56-8-105, which outlines 15 specific actions that constituted unfair claim practices that signify bad faith behavior.1 Such unfair claim practices include: (1) knowingly misrepresenting relevant facts or policy provisions relating to coverages at issue; (2) failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies; (3) failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under its policies; and (4) failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.2 When a violation of this statue occurs, what can an insured do?
Continue Reading Tennessee Bad Faith Claims: Is a Statutory Good Faith Breach Available For Tennessee Policyholders?

On May 14, 2021, the U.S. District Court for the Western District of Arkansas entered a Judgment in favor of a plaintiff policyholder against the defendant insurance company, New Hampshire Insurance Company (“New Hampshire”), in the amount of $300,000.00.1 The course leading to this Judgment is interesting, as the Judgment did not result from a jury trial or a bench trial. Instead, the Judgment resulted from New Hampshire’s voluntary offer to confess judgment in the amount of $300,000.00. This followed a multi-year litigation, during which time New Hampshire denied all liability on the policyholder’s claims of breach of contract and failure to act in good faith and with fair dealing. It is not surprising New Hampshire continued to deny all liability to the bitter end, even in its offer to confess judgment; however, the fact it offered to pay the plaintiff $300,000.00 is telling, as it had previously offered to pay $0.00.
Continue Reading Judgment Entered Against New Hampshire Insurance Company

How Shifting Language Away from “Bad Faith” and Towards “Good Faith” Could Benefit Policyholders, is a post that should be studied. Insurance companies must be held accountable for harm caused when they fail to act in “good faith” and foreseeable damages occur to their policyholder. The standard has nothing to do with somebody or entity being “bad.” The post correctly noted:
Continue Reading Good Faith is What Insurance Claims Service Is All About—Tuesday @2 With Chip Talks About the Good Faith Claims Handling Standard

In the world of first-party insurance claims and litigation, we hear and use the term “bad faith” nearly every day. The term regularly arises when contractors, public adjusters, and attorneys are attempting to resolve a first party insurance claim pre-suit. Then, if litigation is necessary, bad faith often becomes a distinct claim made on behalf of policyholders. Because “bad faith” is a distinct claim in litigation, though, the term is inherently adversarial and, pre-suit, it carries an accusatory tone. It also carries different meanings based upon the state in which the claim arises, and in some states, proving an insurer’s bad faith through litigation is incredibly difficult as it may require proof of intentional dishonesty or oppressive conduct by the insurer.1
Continue Reading How Shifting Language Away from “Bad Faith” and Towards “Good Faith” Could Benefit Policyholders

The California Court of Appeal recently issued an opinion confirming the standard for determining an insurer’s bad faith conduct is whether the insurer acted unreasonably, not whether the insurer refused to pay a reasonable claim. I recently blogged about the California standards for proving bad faith.1 About a week after that blog post, lawyers for Pacific Specialty Insurance Company asked a Los Angeles judge to enter summary judgment against a Merlin client’s bad faith claims because bad faith was supposedly an intentional tort (i.e., the insured needed to prove intent to harm). Not surprisingly, the judge ruled in our client’s favor and rejected this argument. As noted in the blog post, bad faith only requires proof the insurer acted “unreasonably.” About a week later, California’s Second Appellate District Court confirmed in a separate case that bad faith only requires evidence of “unreasonable” conduct.2 Sorry, Pacific Specialty.
Continue Reading California Appellate Court Confirms the Standard for Bad Faith is Whether the Insurer Acted “Reasonably”

Lexington’s insurance company President & CEO is Lou Levinson. He must really have a big ego because what he allows his company to promise regarding claims practices has nothing to do with what is delivered. I invite him and his claims vice president to show up at a claims townhall meeting anywhere in the five largest states to listen to what their customers have to go through. They can invite whomever they want, and we will invite who we want.
Continue Reading Lexington Slow-Pays Claims and Ignores Policyholders

Most California authorities say that the “implied covenant of good faith and fair dealing” obligates the insurer to investigate, process, and evaluate the insured’s claim promptly, thoroughly, and fairly.1 The seminal case describes bad faith as insurer conduct that impairs the insured’s right to receive the benefits for which they contracted.2 My favorite line from case law describes bad faith as an “imprecise label for what is essentially some kind of unreasonable insurer conduct[.]”3
Continue Reading Did the Insurance Company Commit Bad Faith?