The Chanin Building, 122 East 42nd Street, Suite 725, New York, New York 10168

Blog Post

Pursuing a Bad Faith Claim Against Your Insurance Company

Pursuing A Bad Faith Claim Against Your Insurance Company by Evan Schwartz

{3:20 minutes to read} An insurance company engages in bad faith when it unreasonably denies, delays, terminates or underpays your claim.

For example, if the insurance company refuses to pay for your homeowner’s claim or your business interruption claim, or to compensate you for harm caused due to water or fire damage, these denials may have been made in bad faith.                            

Bad faith conduct happens frequently. There is an analysis that requires a skilled attorney to help you determine whether there is a possibility that the insurance company has engaged in bad faith conduct, based on how they have treated your claim. There are enormous differences in the law of the 50 states as to whether you can assert a bad faith claim and what damages, if any, you can recover, as well as what you have to prove to receive damages for the bad faith treatment.

Bad faith damages are those that you may recover beyond what you are entitled to under the insurance contract. So, if your insurance contract entitles you to one million dollars of indemnity or benefits, and you have a one million dollar claim, that amount is just to cover your contract benefits. Bad faith benefits include punitive damages, attorney’s fees, damages for emotional distress, and other damages of that nature. These are called “damages beyond the contract” or “extra-contractual damages.” These are the types of damages that you can recover if you are able to pursue a bad faith claim in your state. 

Keep in mind that just because an insurance company denies, delays, terminates, or underpays your claim does not mean that it was done in bad faith. It is important to be able to look at the manner in which the insurance company has handled the claim and the reasoning that they have used to take action on your claim.

If you do have a valid bad faith claim, it also gives you a great deal of leverage in getting the contract portion of your claim resolved more quickly and for more money than the insurance company was willing to pay because of the insurance company’s extra-contractual exposure. 

Because bad faith claims require a state-by-state analysisand there are different remedies that exist in each state for extra-contractual damagesit is very important for an experienced attorney to evaluate whether or not you can assert a bad faith claim. An experienced bad faith lawyer can look at your case and determine what damages you could recover if you choose to pursue, and are able to pursue, a bad faith claim.                            

If you have any questions regarding bad faith or think your claim has been handled in a bad faith manner by an insurance company, feel free to contact my office to discuss it.

Please contact Schwartz Law today at 212-608-5445 to discuss.



Evan S. Schwartz
Founder of Schwartz Law

what our clients say about us


  • Before choosing Schwartz law I was overwhelmed and confused about the whole LTD process and wanted to make sure I wasn’t making any wrong decisions for me and my family.

    Telecommunications Manager
  • Once a high functioning sales and trading VP at a bulge bracket investment bank, I began to really struggle emotionally esp. after the ongoing stresses of some devastating family health

    Trading VP, Bulge Bracket Investment Bank (original job in New Jersey)
  • Applying for disability, even when the need has become obvious to both yourself and those around you, is not necessarily an easy decision. In my case it meant having to

    Law Firm Partner
  • When I came to see Evan Schwartz, I had already shut down my business, was in the midst of a horrible divorce, had no income and hadn’t even filed a

    Business owner
  • Evan Schwartz and his team of lawyers fought for me like no one has ever for fought for me before. After a series of bad experiences with both doctors and

    IT Director

Latest News

Send us a message

Manhattan Offices

The Chanin Building, 122 East 42nd Street, Suite 725, New York, New York 10168

Toll Free: (800) 745-1755
Phone: (212) 608-5445

Garden City Office

666 Old Country Road, Ninth Floor, Garden City, New York 11530

Toll Free: (800) 745-1755
Phone: (516) 745-1122
Fax: (516) 745-0844