Bad faith is dishonest and deceitful conduct. It is the opposite of good faith, which means behaving reasonably, honestly, and ethically and observing reasonable standards and fair dealings.
Effect of Bad Faith
A party who brings an action in bad faith can lose or limit its claim. The same holds in jurisdictions where lousy faith is recognized as a separate cause of action. A finding of bad faith can negate or reduce the recovery of one or more claims, as well as award a plaintiff punitive damages (where allowed by law), attorney fees, or both.
Automobile insurance is required by law for all vehicles in most states. The stated purpose of automotive insurance is to provide financial protection against physical damage or bodily injury resulting from traffic accidents and against liability that could also arise from there.
But not all automotive insurance is the same. The most common types of insurance are Liability, Collision, and Comprehensive. Liability insurance will cover the property and bodily damage caused to others in an accident. Collision coverage does the same for your vehicle and its parts. Comprehensive coverage will pay out in the event of theft or accidental damage.
A breach of contract claim is when one party does not honor their legal agreement to uphold their end of the bargain. In other words, if an insurance company or its employees fails to pay or denies a claim they believe is valid, the insured policyholder may sue the insurance company for breach of contract. If the policyholder succeeds, the insurance company will be required to cover the insured's expenses or costs incurred as a result of their policy, including any interest or late fees, which will result in an amount greater than the original face value of the policy.