7 Bad Faith Insurance Claim Examples That Prove Your Case

Nov 09, 2026

Last Updated: November 1, 2026

Quick Summary

Bad faith insurance claim examples include wrongful denial of a valid claim, unreasonable delay in processing or paying, failure to investigate thoroughly, lowball settlement offers, misrepresenting policy terms, and failure to communicate promptly. Each pattern leaves a paper trail you can capture, and the same tactics can appear in disability, life, and business liability claims.

A coverage dispute is a disagreement; bad faith is conduct, and the remedies differ.
Log every call with date, method, who you spoke with, and what was said.
Send key communications in writing and follow important phone calls with a summarizing email.
Request the complete claim file, including adjuster notes and internal communications.
Deadlines to file can be short, sometimes one to three years from the denial.

Table of Contents

What Counts as a Bad Faith Insurance Claim Example
7 Bad Faith Insurance Claim Examples You Might Recognize
Insurance Bad Faith Tactics Adjusters Use on Policyholders
Signs of Insurance Bad Faith to Document Right Now
How to Prove Insurance Bad Faith With a Clean Evidence Trail
The Bad Faith Insurance Claim Process, Step by Step
Bringing Your Claim File to a Free Case Review
Frequently Asked Questions

What Counts as a Bad Faith Insurance Claim Example

Call the Merritt & Merritt Law Firm today at 404-975-1775. Offices in Atlanta, Savannah, Statesboro, and Houston.

A bad faith insurance claim example is a documented instance where an insurer breaks its legal duty to handle a policyholder’s claim fairly and promptly.

In practice, the pattern that matters is not a simple coverage dispute. A coverage dispute is a disagreement; bad faith is conduct.

The distinction matters because the remedies differ. A legitimate dispute gets resolved through the policy; bad faith can open the door to additional damages.

7 Bad Faith Insurance Claim Examples You Might Recognize

These seven patterns cover most of what policyholders experience. Each maps to a recognized category of unfair claims practices and leaves a paper trail you can capture.

#	Example	What It Looks Like	What to Capture
1	Wrongful denial	Valid claim rejected on a fabricated or misread exclusion	Denial letter, policy language, proof of loss
2	Unreasonable delay	Months of silence or repeated requests for the same document	Every request, every response date
3	Failure to investigate	No adjuster contact, no site visit, no expert review	Log of who contacted you and when
4	Lowball settlement	Offer far below documented damages, presented as final	The offer letter and your damage records
5	Misrepresentation	Adjuster misstates coverage or your obligations	Written and recorded statements
6	Failure to communicate	Calls unreturned, emails ignored, no status updates	Call logs, emails, certified letters
7	Less-covered lines	Bad tactics in disability, life, or business liability claims	Denial rationale and claim file requests

1. Wrongful Denial of a Valid Claim

The insurer rejects a claim that the policy plainly covers, often by stretching an exclusion past its actual wording.

What most guides miss is how often the denial letter cites a policy section that does not say what the adjuster claims. Read the cited language yourself, word for word.

2. Unreasonable Delay in Processing or Paying

Delay is the quietest form of bad faith. The claim sits. Requests for “just one more document” repeat. Meanwhile, medical bills and lost wages pile up.

Policies and state unfair claims practices rules may set expected response times, and specifics vary by jurisdiction.

3. Failure to Investigate Thoroughly

An insurer that never inspects the property, never interviews witnesses, and never obtains the police report has not evaluated the claim. It has processed it.

Failure to investigate is recognized as an unfair claims practice in some states. If no one has contacted you beyond the initial report, that absence is itself a fact worth documenting.

4. Lowball Settlement Offers

A lowball settlement offer is a payment presented as final that bears little relationship to documented damages.

Watch out: offers often arrive with a short deadline attached. Signing a release ends the claim, so do not sign anything before reviewing the full evaluation.

5. Misrepresenting Policy Terms or Coverage

The adjuster tells you the policy “doesn’t cover that” or that you “have to” give a recorded statement. Sometimes that is true. Often it is not.

Misrepresentation of policy terms is one of the clearest bad faith insurance claim examples because the policy itself is the proof. If your claim was denied outright, learn the common reasons insurance companies deny injury claims and how to fight back.

6. Failure to Communicate or Respond Promptly

Calls go unreturned for weeks. Emails vanish. The claim portal shows no movement. Failure to respond promptly can be an unfair claims practice under state law, separate from delay in payment.

Keep a simple log: date, method, who you spoke with, what was said. That log becomes powerful when it shows a pattern.

7. Bad Faith Tactics in Less-Covered Insurance Lines

Bad faith is not limited to auto and homeowners claims. Disability and life insurance claims and business liability claims can also involve disputed policy definitions, contestability questions, and reservation-of-rights letters.

These lines get less attention, which is exactly why the tactics persist.

Insurance Bad Faith Tactics Adjusters Use on Policyholders

Adjusters work inside a system that rewards closing files, and it helps to recognize the tactics that can appear in that process.

Common tactics include:

Requesting a recorded statement before you understand the claim
Asking for the same documentation multiple times
Framing an early offer as generous when it is not

Knowing which tactics can appear in advance helps you respond to them. For a deeper rundown, see these insurance company tactics after a car accident.

Signs of Insurance Bad Faith to Document Right Now

Start documenting today, not after you hire counsel. Memory fades and records disappear.

Infographic process for documenting bad faith insurance evidence using medical bills and policy letters

The signs worth capturing:

Missed response deadlines
Contradictory statements from the same adjuster
Denials that cite policy sections you cannot find

Before you give a recorded statement, understand what you are agreeing to. Read whether you should give a recorded statement to an insurance adjuster. Understand what you are agreeing to before you give a recorded statement.

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How to Prove Insurance Bad Faith With a Clean Evidence Trail

Proof in a bad-faith case is not a single document, it is a dated record showing what you provided, when, and how the insurer responded. The claim file belongs to the insurer, but you can build a parallel file that does the same work.

The dated evidence checklist

Build this from day one. Each item should carry a date and, where possible, delivery confirmation. (Source: Consumer Financial Protection Bureau (CFPB) data on complaint trends)

At or near the date of loss

The complete policy, including declarations, endorsements, and any riders, not just the summary page.
Photos and video of the damage or loss, taken before repairs or cleanup.
Receipts, estimates, and invoices for losses claimed.

During the investigation

A dated log of every call: date, time, who you spoke with, what was said, and what was promised.
Every letter and email from the insurer, saved as PDFs with headers intact.
Every document you sent, with the date sent and the delivery method (certified mail receipt, carrier tracking, email read receipt).

After a denial or delay

The denial letter, with the specific policy sections cited.
Your written request for the complete claim file, with the date sent.
The insurer’s response to that request, or the absence of one.

Pro TipSend key communications in writing and keep copies. A clean timeline showing what you provided and when the insurer responded is the backbone of a bad-faith argument. If a phone call matters, follow it with an email summarizing what was said.

Mapping evidence to conduct

The same documents prove different things depending on the conduct at issue:

Failure to investigate: the claim file shows no adjuster contact, no site visit, and no expert review. Your log of who contacted you and when is the proof.
Unreasonable delay: the dates you submitted documents versus the dates the insurer responded, or failed to. Repeated requests for the same document are especially strong.
Wrongful denial: the denial letter cites policy language that does not say what the adjuster claims. Read the cited section word for word and compare.

Requesting the claim file

Send a written request for the complete claim file, including adjuster notes, internal communications, and the evaluation or estimate relied on. Some states require disclosure on request; others require a formal demand or litigation. Keep the request letter and the response, or the silence, in your file.

Distinguishing a dispute from bad faith

An unfavorable decision is not, by itself, bad faith. Insurers may dispute coverage, investigate, and even be wrong. What crosses the line is conduct: failing to investigate, ignoring evidence, misstating the policy, delaying without reason, or offering far below a documented evaluation.

Watch OutDeadlines for filing a bad-faith claim or a breach-of-contract action vary by state and can be short, sometimes one to three years from the date of the conduct or the denial. Confirm the limitation period that applies to your policy before relying on any timeline.

The Bad Faith Insurance Claim Process, Step by Step

Most guides stop at “report the claim, then sue.” That skips the middle, the part where a paper trail either forces a fair payment or builds the record you will need later. Deadlines and remedies vary by state, so confirm the timing guidance against your policy and your state insurance department’s rules.

Step 1: Report the claim and lock in the claim number

Report promptly, most policies require “prompt” notice, and some set specific windows (often 20 to 60 days for property claims, though wording varies). Ask for the claim number and the assigned adjuster’s name, phone, and email in writing. If the insurer offers only a phone number, send a follow-up email confirming the report date and claim number, that email is the first entry in your timeline.

Step 2: Submit a complete proof of loss

Many policies require a sworn proof of loss within a set period after the insurer requests it, commonly 60 days, but confirm your policy’s language. Submit it with supporting documentation and keep delivery confirmation. A complete submission starts the clock on the insurer’s response obligations in most states.

Step 3: Track the insurer’s response against real deadlines

This is where most policyholders lose leverage. State unfair claims practices acts and regulations set expected response times, and they differ widely. Common patterns include:

Acknowledgment of the claim within 10 to 15 days of notice.
A coverage decision within 30 to 45 days after receipt of a complete proof of loss, with written notice if more time is needed.
Payment within a set period (often 30 days) after settlement agreement.

These are patterns, not a uniform rule. Your state’s insurance code and the policy itself control. Log every date you send something and every date the insurer responds, or fails to.

Watch OutA missed deadline is evidence, but it is not automatically bad faith. The conduct must be unreasonable under the circumstances and the governing standard. Document the miss; let the pattern speak.

Step 4: Request the claim file

Once delays or a denial appear, send a written request for the complete claim file, including adjuster notes, internal communications, and the evaluation or estimate the insurer relied on. Some states require disclosure on request; others require a formal demand or litigation.

Step 5: Send a demand letter

A demand letter lays out the timeline, the policy language, the documented damages, and the remedy sought, with a deadline for response. It is not a threat; it is a record-building step. Keep it factual and attach the key documents. Many insurers reassess after a well-documented demand because the file now shows the policyholder is organized and represented.

Step 6: File a complaint with the state insurance regulator

Every state has an insurance department that accepts consumer complaints. A written complaint creates an official record, triggers a regulatory inquiry, and sometimes produces a response the insurer would rather not put in writing. The National Association of Insurance Commissioners publishes state-by-state consumer resources and links to each state’s complaint portal.

Step 7: Pursue legal remedies

If the record supports it, the next step is a demand for the remedies available under your state’s law. Those can include:

Contract damages, the benefits owed under the policy.
Consequential damages, foreseeable losses caused by the delay or denial, where state law allows.
Interest, prejudgment or statutory interest on the amount owed.

Key TakeawayRemedies are jurisdiction-specific. A demand letter that cites the wrong standard or the wrong deadline weakens your position. Confirm the rules that apply to your policy before relying on any timeline or remedy listed here.

Distinguishing a legitimate dispute from bad faith

An unfavorable decision is not, by itself, bad faith. Insurers are allowed to dispute coverage, investigate, and even be wrong. What crosses the line is conduct: failing to investigate, ignoring evidence, misstating the policy, delaying without reason, or offering far below a documented evaluation.

Bringing Your Claim File to a Free Case Review

A free case review is a no-obligation evaluation where an attorney reviews your claim file and tells you whether the conduct you experienced supports a bad faith argument. This guide to free case evaluations for injury lawyers explains what the review involves and how to prepare.

Merritt & Merritt Law Firm offers 24-hour service, including visits to your home, office, or hospital, and you pay only if we win. Gather the documents described above before your review.

If you are weighing whether the conduct you experienced crosses the line, a documented review of the denial or delay is the place to start. Learn how to stop insurance adjusters from pressuring you into lowball settlements.

Insurance companies count on policyholders not knowing the difference between a dispute and bad faith.

Frequently Asked Questions

What are examples of bad faith insurance practices?

Common examples include denying a valid claim without a stated policy reason, sitting on a claim for months without explanation, skipping obvious investigation steps, offering far less than the documented damages, and telling a policyholder their policy covers something it does not. Each one can violate the insurer’s duty to act in good faith and deal fairly with its policyholder under the applicable state’s unfair claims practices rules.

Is delaying an insurance claim considered bad faith?

A delay can be bad faith when the insurer has no reasonable justification and the policyholder has supplied the requested proof of loss and supporting documentation. Ordinary backlog is not automatically bad faith, but repeated requests for the same records, silence after a deadline, or a stalled claim file with no activity for weeks are the kinds of patterns that support a bad faith argument. Keep a dated log of every contact.

How can I tell if an insurance company is acting in bad faith?

Watch for the signs of insurance bad faith: shifting explanations for a claim denial, an adjuster who will not put anything in writing, a settlement offer that ignores your medical records, or a demand that you sign a release before you understand the coverage dispute. Save every letter, email, and voicemail. If several of these signs appear together, a free case review can tell you whether the conduct crosses from a routine dispute into bad faith.

What should I do if my insurance claim is handled unfairly?

Request the claim file in writing, keep paying nothing to a third party without advice, and do not sign a release or give a recorded statement until you understand what you are giving up. Send a written demand letter with your supporting documentation and a clear deadline. If the insurer still stonewalls, an attorney can pursue an appeal or legal remedies, including recoverable damages, depending on the state’s rules and your policy terms.

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