All insurance companies owe a duty of good faith and fair dealing to their customers, its insured, because of the customer’s contract (insurance policy) with the insurance company and because it is the law the state in which the insurance policy was provided. This is referred to as a "first party" contract.
When it comes to insurance bad faith, the insurance company for the person or entity that injured or damaged you does not owe a duty of good faith and fair dealing to you precisely because you have no contract with them. Insurance bad faith only regards insurance policy to which you have a claim. A liability insurer owes a duty of good faith and fair dealing to its customers, the person or entity that has injured or damaged you. You are in a third party relationship with the liability insurer. So the liability insurer is not required to treat you fairly or to deal with you in good faith. Therefore they usually don't. Here are some issues to keep in mind if you feel you have not received a duty of good faith and fair dealing from your insurance company.
If your insurance company violates the terms of your insurance contract, then you can sue it for breach of contract. In this case you can recover common law contract damages if you win the case by consulting with insurance bad faith attorneys. If your insurer willfully violates the policy, you can sue for breach of contract. In many cases you can recover common law contract damages and triple damages for emotional distress if you have proved the willful conduct convincingly and depending on the state in which the policy was provided. If your insurer acted unreasonably by violating the policy. This happens if they mishandle your claim willfully and its conduct was unreasonable or has recklessly disregarded the fact that its conduct was unreasonable and you were damaged in this process, then you can recover common law contract, economic damages and non-economic damages. This is called insurance bad faith breach of contract or first party bad faith handling of your claim. If your insurer has denied or delayed payment of your policy benefits without a reasonable basis, then you will be able to recover double or sometime triple damages, court costs, and attorneys fees if you win your case. If the jury in your case finds beyond a reasonable doubt that your insurance company acted in a fraudulent, malicious or willful and wanton manner, then you can recover punitive damages.
If you feel you have been mistreated by your insurance company, you owe it to yourself to contact insurance bad faith attorneys.
