Insurance Bad Faith
Insurance is intended to provide protection against covered losses. In practice, the insurer is also responsible for evaluating and paying claims—often with significant discretion over how those decisions are made.
That structure can create tension. When an insurer fails to act reasonably in handling a claim, or places its own interests ahead of its insured, it may give rise to a claim for insurance bad faith.
Request a Case AssessmentHow Bad Faith Claims Arise
Bad faith issues can arise in a number of ways, including:
- unreasonable denial of a covered claim
- delays in investigating or resolving a claim
- failure to conduct a prompt and adequate investigation
- undervaluation or “lowball” offers
- shifting or inconsistent explanations for coverage decisions
These practices are sometimes described in shorthand as “Delay. Deny. Defend.”—a description of how claims can be handled in a manner that discourages or pressures insureds from pursuing full benefits.
In some cases, the dispute centers on whether a claim is covered. In others, it involves how the insurer handled the claim, regardless of the coverage position ultimately taken.
The Duty of Good Faith
Courts have recognized that the relationship between an insurer and its insured carries a duty of good faith. This includes an obligation to:
- deal fairly with the insured
- give equal consideration to the insured’s interests
- investigate claims in a reasonable and timely manner
- make coverage decisions based on the facts and policy language
A bad faith claim typically arises when an insurer deviates from these obligations in a way that causes harm to the insured.
Washington Law and the IFCA
Washington law provides several avenues for addressing improper claims handling. The Insurance Fair Conduct Act (IFCA) identifies a range of unfair claims settlement practices and provides a framework for pursuing certain types of claims.
Depending on the circumstances, these may include:
- failure to conduct a reasonable investigation
- unreasonable denial of benefits
- improper claim handling practices
A successful claim under IFCA may allow recovery of actual damages, along with attorneys’ fees and costs. In certain cases, additional damages may be awarded by the court.
Evaluating a Bad Faith Claim
These matters often require careful analysis of:
- what the policy covers and how it applies
- how the insurer investigated and evaluated the claim
- the timing and consistency of the insurer’s decisions
- whether the insurer’s conduct was reasonable under the circumstances
Insurance disputes can involve detailed policy language, complex factual records, and competing interpretations of both.
Types of Insurance Claims
Bad faith issues may arise in a variety of contexts, including:
- first-party claims (property, homeowner’s, or similar policies)
- third-party liability claims
- underinsured or uninsured motorist claims
- personal injury protection (PIP) claims
- other coverage disputes involving indemnity or defense obligations
The structure of the claim and the type of policy involved can significantly affect how a case is evaluated and pursued.
Practical Considerations
In many situations, an insurer’s initial denial or delay can place significant pressure on the insured—particularly where repairs, medical care, or other obligations depend on timely payment.
Disputes may involve:
- ongoing communications with adjusters
- requests for additional documentation
- coverage position letters
- coordination with defense counsel if litigation arises
These factors often shape how the claim should be developed and when legal action may be appropriate.
Moving Forward
If you believe your insurer has not handled a claim reasonably or in good faith, it may be worth evaluating your situation more closely.
We assess these matters by examining both the policy and the insurer’s conduct, with a focus on how the claim can be developed, supported, and resolved in practice.
Request a Case Assessment
Submitting a form allows our team to evaluate your situation and determine whether we can assist.
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