Insurance 101 – Chapter 11 – Volume 22 – First Party Bad Faith

First Party Bad Faith

As insurers are well aware, the major motivation for obtaining disability insurance is to provide funds during periods when the ordinary source of the insured’s income—his earnings—has stopped. The purchase of such insurance provides peace of mind and security in the event the insured is unable to work. To  protect these interests it is essential that an insurer fully inquire into possible bases that might support the insured’s claim. The courts recognize that distinguishing fraudulent from legitimate claims may occasionally be difficult for insurers, especially in the context of disability policies. However, an insurer cannot  reasonably and in good faith deny payments to its insured without thoroughly investigating the foundation for its denial.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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