5 Examples of Insurance Bad Faith

October 14, 2025 | By Beston International Law Firm

There are several ways in which an insurance company may act in bad faith, and it is important to be able to identify them in the event your insurance company ever tries to pull a fast one on you.

Here are five examples of insurance bad faith to keep in mind:

#1 – Refusal to pay out a viable claim.

Sometimes insurance companies try to avoid paying out viable claims in order to save money. Remember, your insurance policy is a contract and if your provider fails to uphold its end of the deal, you may be able to file a lawsuit against it for bad faith.

#2 – Denial of a claim without a valid reason.

The insurance company must always provide a valid reason for why they choose to deny a claim. If your insurance provider fails to give you a reason for denying your claim or a claim by a third party, it may be acting in bad faith.

#3 – An offer to a claimant that falls short of the claim’s actual value.

In an attempt to save money, sometimes insurance companies try to offer claimants a settlement that is less than what their claim is truly worth. This is an act of bad faith and should be held accountable.

#4 – The delay or denial of claim decisions.

Your insurance company knows how important it is that you receive the compensation from your claim within a reasonable amount of time so you can pay for your medical care or receive money for the time off work you’ve been forced to take as a result of your injuries.

When your physician recommends a particular treatment plan that he or she concludes is reasonable and necessary for your care, your insurance provider is required to take action on the request for care within a reasonable period.

If there are unreasonable delays or your claim is denied, you may have a case against your insurance provider for bad faith.

#5 – Distortion of the law or language within your policy.

It is an act of bad faith for the insurance company to willfully misconstrue the law or language within your insurance plan and deny your valid claim as a result of this misrepresentation. Insurance companies have a duty of good faith and fair dealing, which requires that they must be honest about their statements regarding the law and your policy.

We’re Here to Help

Insurance companies are paid to help you. When they act in bad faith, they are neglecting their duty to provide you with adequate service.

Our team holds insurance companies accountable for their wrongdoing. If your insurance provider has acted in bad faith, we want to do everything we can to help you recover the compensation you deserve.