What Does Bad Faith Mean?

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What does Bad Faith mean? Read on to discover the definition & meaning of the term Bad Faith - to help you better understand the language used in insurance policies.

Bad Faith

Bad Faith

A term describing blatantly unfair conduct that exceeds mere negligence by an insurance company. For example, a bad faith claim may arise if an auto liability insurer arbitrarily refuses to settle a claim within policy limits, where an insured's liability is incontrovertible. Bad faith damages, also known as extracontractual damages, are often substantial. They frequently exceed the limits of the insurance policy that is the subject of the claim.

We hope the you have a better understanding of the meaning of Bad Faith.

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