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

In 2007, a law became effective in Maryland that, for the first time, permitted insureds to sue their insurers for failing to act in good faith in settling their first party claims under a property insurance policy. The cause of action, which is found in Maryland Code § 3-1701, applies in actions to determine whether coverage exists under the relevant insurance policy, and also in actions to determine the extent to which the insured is entitled to receive payment from the insurer for a covered loss.
Continue Reading Insurance Bad Faith in Maryland: Part 1