Bad Faith Insurance Claim

Every insurance company owes a duty of “good faith” to its insured. That duty requires an insurer to compensate its policy holder in a timely manner. The duty also requires the insurer to investigate the claim promptly, and it must do so fairly and diligently. For their part, the insured must file their claims promptly and assess their losses as accurately as they can. The duty of good faith requires insurers and their policy holders to treat each other fairly at all times.

Sometimes an insurer fails to treat its insured fairly. In cases where the insurer’s conduct becomes high handed, malicious, or arbitrary, the insurer is considered to have breached its duty of good faith to its insured. In these types of cases, the insurer is said to have acted in bad faith towards its insured and the insurer may be required to pay punitive damages, aggravated damages or damages for mental distress to its insured.

The Ontario Insurance Act interprets “bad faith” as a conscious wrongdoing or act of dishonesty operating within an improper or illegal design. Bad faith is distinct from negligence in that it involves ill intent, rather than simply poor judgment.

Situations involving bad faith conduct on the part of the insurer may arise in the context of a disability insurance claim, an accident benefits claim, or a fire loss claim. You may have a legitimate bad faith claim against your insurer if it mistreated you and it acted in bad faith in handling your claims.

Examples of bad faith insurance claims include:

• Failure to render a decision about benefits in a timely fashion
• Denial of benefits without medical certification indicating the insured is fit to resume work
• Unreasonable interpretation of insurance policies

If you suspect you may be the victim of a bad faith insurance claim, get in touch with a member of our team. We will assess your case and help you determine the best course of action.