Grounds for Finding Bad Faith – 2
This duty of good faith also is breached where the insurer holds up payment of undisputed claims pending resolution of disputed claims. The insurers should understand, when handling a claim by a business person, like the claim in Bodenhamer, supra. that a business has more to do than resolve an insurance claim. The insurer should not deal with the minutiae of the claim process if it is detrimental to the business of the insured. In Bodenhamer, the failure of the insurer to settle the claims of its insured’s customers, while waiting to settle with the insured (two separate parts of the policy coverage) did not consider the damage it caused its insured’s good will.
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