Good faith is an essential part of every insurance interaction because the insurance companies are in a position of power over you. You have very little chance of fighting them once they make a decision, and they control the process.
Because of this, the law covers bad faith in insurance claims. Bad faith occurs when the insurance company acts in an unfair and devious way. FindLaw explains every state regulates bad faith in a different way. To prove your case, it is important to understand the law because you can guarantee the insurance companies do.
Regardless of where your case is occurring, there are two general elements you need to prove. You want to show the insurance company unreasonably denied your benefits for a claim. You need the denial of benefits owed under a valid policy and an unreasonable withholding of those benefits.
The tricky part of bad faith insurance is proving the unreasonable nature. It can mean a variety of things for a decision to not be based on solid reasons. Generally, the court will look for direct violations of terms or other insurance laws. Unreasonable may also be violating deadlines or simply not paying out an approved claim.
A bad faith insurance situation can become complicated. Insurance companies have high-priced lawyers working for them to help them avoid paying you benefits. If they truly want to not pay, they will work hard to make it happen. You will have to have a solid case against the company with plenty of evidence if you wish to win.