Breach of Contract

A breach of contract occurs when your insurance company does not do something that they are contractually obligated to do. For example, if your vehicle is covered from flooding by your car insurance and your insurance company denies responsibility after your car is flooded in a storm, then you may be able to file a breach of contract claim against the insurance company.

Bad Faith

An insurance company owes its policyholders a duty to act in good faith when determining whether or not to grant a claim. They should not try to find loopholes to get out of paying its policyholders. If your insurance company is denying your claim, then you may have a case against the company for bad faith. Common factors of bad faith include:

• Denial of coverage for no reasonable basis.
• Offering a settlement that is unfairly low.
• Failure to negotiate to settle the claim.
• Failure to tell the policyholder his or her policy limits.
• Failure to explain why a claim has been denied.
• Failure to pay the claim in a reasonable amount of time.
• Failure to investigate the claim.
• Failure to communicate information to the policyholder.

Typically, a bad faith claim can be solved in four different ways: the two parties will either settle the claim, go to mediation (a meeting with a third party to negotiate your claim), enter into arbitration (a more formal, private judicial determination of a dispute instead of going to court), or the parties will go to court, and a verdict will be entered.