In every insurance policy (contract) there is an Implied Covenant of Good Faith and Fair Dealing that must be honored by every insurance company. An insurance company commits an act of bad faith when it violates this implied covenant.

Examples of bad faith include:

• Failing to timely, thoroughly, and objectively investigate a claim;
• Unreasonably denying a covered claim;
• Underpaying a covered claim;
• Unreasonably delaying in paying a covered claim;
• Unreasonably refusing to defend the insured under a liability policy;
• Refusing to authorize medical treatment that is reasonably needed under a health insurance policy;
• Placing the insurance company's interest above the interest of the policy holder;
• Failing to look for coverage to determine if it is available;
• Misrepresenting what is included in a policy;
• Interpreting policy language unreasonably against the insured;
• Failing to promptly provide a reasonable explanation of the basis for denial of a claim; and
• Advising a claimant not do obtain the advice of an attorney.

Bad faith damages can include:

• Reasonable attorney's fees,
• Lost earnings,
• Medical expenses,
• Emotional distress,
• Opportunity costs,
• Loss of use of property, and
• Punitive damages.