What Is Insurance Bad Faith?

• May 29 2025
• |   Insurance

Insurance bad faith occurs when an insurance provider does not keep its promise to treat you, a policyholder, fairly. When an accident happens, like a car accident or a house fire, you expect your insurance provider to help you out; after all, that is why you have been paying your insurance premiums. However, you might learn that your insurance provider is unwilling to hold up their end of the deal.

Insurance bad faith can happen in different ways. Your insurance provider might deny your claim when it should be covered; delay it for no reason; or offer far less than you deserve when they choose to pay. Sometimes they might not even bother to look into your claim properly. When an insurance company acts this way on purpose or without a good reason, it is called bad faith, and it happens more often than you might think.

As a policyholder, your insurance provider has a legal duty to act in good faith and deal with your claim fairly and honestly. However, when they neglect this duty, you can take legal action and seek compensation for damages. In situations like this, our skilled lawyer can play a vital role.

An experienced insurance bad-faith lawyer from Leverty & Associates Law can review the details of your case, gather evidence of your insurer’s misconduct, and help you understand your legal rights. With our attorneys, you can fight against unfair treatment and pursue the compensation you deserve. If an insurance company has mistreated you or a loved one, don’t hesitate to contact us.

Why Hire Our Attorneys to Help You?

Our legal team at Leverty & Associates Law has extensive experience handling insurance bad faith. We have in-depth knowledge of insurance law and understand insurers’ strategies to avoid paying legitimate claims. This expertise allows us to advocate for your rights and maximize your benefits effectively.

Our attorneys are fierce advocates who will fight relentlessly to ensure you receive fair treatment. We are committed to holding insurance companies accountable for their actions. We have a strong track record of successfully resolving bad-faith insurance cases for our clients, and we can help fix yours, too. You can rely on us. Contact us at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas) to learn more about how we can help you.

Our firm has won over $150 million in settlements and awards for valued clients.

What Is Bad Faith?

Bad faith is a legal term that means dishonesty or unfair dealing. In a legal context, bad faith occurs when a person or company intentionally acts deceptively or dishonestly to avoid keeping their promise or performing their duties.

When it comes to contracts like insurance policies, both parties agree to act in good faith, that is, to be honest and fair with each other. However, when one party breaks that trust by misrepresenting facts or delaying obligations without cause, they may be acting in bad faith, which can be grounds for a lawsuit, especially if that party’s actions cause financial harm or emotional distress.

Examples of Bad Faith Insurance Dealings

Knowing and understanding the different forms of bad faith practices is essential. As a policyholder, it will help you recognize when you are being mistreated. Below are typical examples:

Unreasonable Delays in Processing Claims

The most common form of bad faith is the unnecessary delay in processing claims. Insurance companies are legally required to handle claims promptly and efficiently. However, some can intentionally delay your claim’s investigation, evaluation, or payment without a valid reason. These delays can cause significant stress and financial hardships, especially when you need a timely settlement to cover your expenses.

Unreasonably Denying Valid Claims

Another common bad faith insurance practice is denying valid claims without a reasonable explanation. This occurs when an insurer fails to conduct a thorough investigation or ignores clear evidence that supports the claim. When your insurer denies a legitimate claim without justification, it breaches the insurer’s duty and undermines the trust policyholders place in the insurance system.

Underpaying Compensations

Insurance providers that act in bad faith may offer settlements significantly lower than your claim’s actual value. This practice aims to minimize your payouts and pressure you into accepting compensation that might not cover your incurred damages. These offers can be particularly harmful when faced with substantial medical bills, property damage, or financial burdens.

Poor Communication

Your insurance provider may act in bad faith when they fail to respond to your inquiries, provide updates, or explain policy provisions clearly. Since communication is essential in any insurance claim process, a lack of communication can leave you in the dark about the status of your claim and your rights or what you are entitled to under the policy.

Misrepresenting Policy Language

Insurance providers have a legal duty to represent the terms and conditions of the policies accurately. However, some may intentionally misinterpret or misrepresent policy language to avoid paying claims. They can deny coverage based on vague or ambiguous terms created against your interests.

Insurance companies often have powerful legal teams protecting their interests. Their power does not intimidate us, so you can count on us.

When Do You Need an Insurance Bad Faith Attorney?

You need an insurance bad faith lawyer when you are going against an insurer or insurance provider who unjustly denied your claim. If you, as a policyholder, believe that your insurer or insurance company is acting in bad faith, contact an insurance bad faith attorney immediately. At Leverty & Associates Law, our attorneys will tell you if your insurer or insurance company’s action or inaction is in bad faith and brief you on your options and the next step to take to succeed.

Get Help From Leverty & Associates Law

At Leverty & Associates Law, our knowledge and years of experience in bad faith insurance help us work well with our clients. If you need a trusted team of attorneys to advocate for you, we are the ones to call. Contact us at (775) 322-6636 (Reno) or (702) 507-0201 (Las Vegas); we offer free initial consultations.