What Is a Bad Faith Insurance Claim?

A bad faith insurance claim happens when an insurance company acts unfairly or dishonestly when handling your claim. In Massachusetts, insurers are legally required to treat claimants fairly. When they do not, they may face penalties and extra damages.

What Does 'Bad Faith' Mean?

Insurance companies have a legal duty to handle claims honestly and promptly. Bad faith means they are not fulfilling that duty.

Common examples of bad faith behavior include:

Refusing to pay a valid claim without a reasonable reason
Delaying payment without a good explanation
Offering a settlement that is far too low, given the facts
Failing to properly investigate your claim
Misrepresenting the terms of the policy
Threatening or pressuring you into accepting a low offer

Massachusetts Law on Bad Faith Insurance

The Commonwealth has strong consumer protection laws. Massachusetts General Laws Chapter 176D governs how insurance companies must handle claims. It prohibits unfair settlement practices.

If an insurer violates Chapter 176D, you may also have a claim under Chapter 93A, which is the state’s consumer protection law. A Chapter 93A violation can result in double or even triple damages, plus attorney fees. That is a serious consequence for an insurer that acts in bad faith.

A Real-World Example of Bad Faith Behavior

Imagine you were rear-ended and your medical bills are $30,000. You have clear evidence that the other driver was at fault. But the insurance company offers you $3,000 to cover property damage only and stops responding to your calls.

That kind of behavior may qualify as bad faith. Your personal injury lawyer can send a formal demand letter, document the unfair conduct, and pursue the insurer for the full value of your claim plus potential penalties.

Does This Apply to Your Own Insurance Company?

Yes. Bad faith claims can apply to your own insurer as well as the other driver’s. For example, if you have uninsured motorist coverage and your own company is unreasonably refusing to pay out, that may be bad faith.

What Should You Do If You Suspect Bad Faith?

Keep records of everything. Save all letters, emails, and notes from phone calls. Write down dates and names. This documentation can be key to proving bad faith later. Then talk to a bad faith claims lawyer as soon as possible. Bad faith insurance claims have their own rules and deadlines. The sooner you get legal help, the better protected you are.

Call DiBella Law Injury and Accident Lawyers at 855-342-3552. We respond quickly because we know timing matters. The consultation is free, and there is no fee unless we win.