Insurance Archaeology

The Difference Between Good Faith and Bad Faith Claims

Ben Pariser


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When insurance companies enter into agreements it is expected that they will act in good faith, acknowledging claims as valid if the policy is valid, or not uphold the deal provided there is good reason. What if an insurance company refuses to uphold an agreement without good reason? This results in a bad faith claim. A court’s decision as to whether an insurance company acts in good faith or bad faith boils down to one primary measurement: reasonableness.

Good Faith Claims

Good faith claims are claims where the terms are reasonably upheld by the insurer. What constitutes good faith claims varies by jurisdiction, but it generally means fairly, honestly, and reasonably upholding the obligations of a contract. When insurance policies are agreed upon, it is established that the insurer and the policyholder will both act in good faith.  To act in good faith, for example, the insured should disclose important facts to the insurer when seeking insurance and an insurer should handle claims in a timely manner. This results in a fair dealing of a contract—the insured made the initial investment, so if a claim is made it is time for the insurer to uphold their end of the deal.

Bad Faith Claims

Bad faith claims are the opposite of good faith claims, occurring when insurers do not reasonably uphold agreements made in a contract. In addition to whether or not an insurance company is acting reasonably, a court of law may identify bad faith by taking into account the insurance company’s intent. Signs of bad faith may include deceptiveness, misrepresentation of facts, or unreasonable delays in payment. Laws against bad faith exist to prevent insurance companies from taking unfair advantage of liable parties.

In Pursuit of Good Faith Claims

All of the claims Restorical supports are good faith claims. We work with care and perform our due diligence in the cases we are involved in, ensuring that the coverage and defense counsel are aligned. This leads to a track record of good faith claims and positive results for clients who we’ve helped locate historic insurance that protects them from costly liabilities. Contact us today to learn how we can help you uncover valuable, historic insurance policies, or read our case histories to see how we’ve helped our clients achieve positive results using their historic insurance


We are not attorneys, this is not legal advice. 

Ben Pariser

One of Ben’s favorite parts of insurance archeology is knowing Restorical is making a difference, helping to clean up the environment one polluted property at a time while also changing people’s lives.


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