What is Bad Faith Insurance Law?
Bad faith insurance law is made up of state and federal laws that govern the conduct and practices of insurance companies. Bad Faith insurance law is passed to protect consumers from becoming victims of the many bad faith practices used by some insurers.
There is no single bad faith insurance law that governs the actions of all insurance companies. An example of an insurance bad faith law is ERISA (the Employee Retirement Income Security Act). This federal law sets standards for the protection for individuals in most of the voluntarily retirement plans in the United States.
There are many ways that an insurer may act in “bad faith” toward a policyholder. When anyone enters a contract with and pays premiums to an insurance company, the insurer has the legal duty to act in good faith.
An insurance policy is a contract between the policyholder and the insurance company. In [...]