When you buy an insurance policy—whether it’s health insurance, long‑term disability, or other coverage—you justifiably expect the insurer to treat you fairly. You pay premiums, you follow the rules, and when you suffer a loss or need benefits, you expect insurers to do their part: investigate reasonably, make payments when due, and communicate in good faith.
Unfortunately, insurance companies sometimes fail in these duties. When that happens, policyholders may have the right to bring a bad faith insurance claim. At Bryant Legal Group, we help people who believe their insurers are not acting fairly to understand what “bad faith” means, how to spot it, and how to hold insurers accountable.
If you would like to speak to one of our bad faith insurance attorneys, please don’t hesitate to contact us.
What Does “Bad Faith” Mean?
Bad faith, in this context, refers to insurer behavior that violates the duty of “good faith and fair dealing” that they owe their policyholders. In most states, including Illinois, this duty requires that an insurer not only follow the letter of the policy but also act reasonably, honestly, and fairly in handling claims. When the insurer acts unreasonably, unfairly, or deceitfully, that may be bad faith.
Insurers don’t just breach your contract when they outright deny a valid claim. Bad faith can take more subtle forms including delays, misrepresentations, or skirting responsibilities to save money.
What Qualifies as Bad Faith Insurance?
Some insureds may wonder whether what they’re experiencing amounts to bad faith or just a “disagreement.” It’s important to distinguish between legitimate coverage disputes that happen versus conduct that crosses the line into bad faith.
Below are common examples of bad faith behavior seen in insurance disputes.
- Unreasonable denial of a valid claim: The insurer denies coverage although coverage clearly applies based on policy language and presented evidence.
- Improper or inadequate investigation: The insurer fails to gather sufficient evidence, ignores key medical records, fails to interview treating physicians, or relies on flawed or incomplete evaluations.
- Undue delay in deciding or paying a claim: The insurer drags their feet, missing deadlines, failing to respond to inquiries, or delaying payment without good reason.
- Misrepresentation of policy terms: The insurer misleads the insured about what the policy covers, what is required, or how to prove the claim.
- Offering less than what is owed: The insurer attempts to low-ball payments or settlements clearly worth more under the policy, often citing technicalities or isolated issues.
- Failure to respond to document requests: When claimants request papers or information, the insurer stalls or outright refuses to provide them.
- Refusal to pay part of a claim conceded as due: Maybe the insurer admits part of the claim is valid yet still refuses to pay that portion.
These represent just some of the behaviors that may be actionable as bad faith. Each case depends on the specific policy language, the jurisdiction, and the facts.
RELATED: How to Talk to Insurance Claim Adjusters About Your Long-Term Disability Case
Is Your Insurance Under ERISA? That Matters
Before deciding whether you can bring a bad faith claim, it matters which insurance policy you have and under what law it falls.
- Private, non‑employer policies (or those issued outside ERISA) often allow state law bad faith claims.
So a key first step is determining which law applies. Bryant Legal Group frequently handles cases and helps clients identify whether their coverage is governed by ERISA or not.
How Attorneys Investigate and Prove Bad Faith Insurance
Proving bad faith is more complicated than proving a breach of contract. You need more than a showing that the insurer denied benefits; you must demonstrate that the insurer acted unreasonably or with troubling intent.
Here’s how attorneys like those at Bryant Legal Group approach a bad faith claim:
Policy Review and Coverage Analysis
Your lawyer reviews all relevant policy documents: declarations, definitions of coverage, exclusions, reporting rules, deadlines, and notice requirements. Understanding exactly what promises the policy makes and what conditions it imposes is essential.
Documenting the Claim File
Your attorney will gather medical records, communications with the insurer, claim forms, adjuster notes, internal reports, denials, and any requests for additional info to assess whether the insurer’s decisions aligned with the facts. Sometimes this information will be acquired via discovery or demands for the insurer’s file.
Timeline and Delay Analysis
Part of proving bad faith may lie in demonstrating unreasonable delays or timetables. How long before the insurer acknowledged your claim? How long before they responded to your documentation, medical records, or doctor’s statements? Did they repeatedly ask for irrelevant or redundant items to delay?
Expert Opinions
Many bad faith cases involve consulting with medical experts (to verify the condition and treatment), actuarial or insurance experts (to interpret industry standards and policy norms), and sometimes vocational experts (to show what work is possible or not). These experts can help establish what a reasonable insurer would have done under the same circumstances.
Comparing Conduct to Industry Standards and State Law Requirements
What do courts in your state require of insurers? What does “good faith” demand in similar cases? Your attorney will examine statutes, case law, regulations, and precedents. For example, in Illinois, insurers are not allowed to deny or delay claims on “vexatious or unreasonable” grounds.
Showing Harm (Damages)
You’ll need to show how the insurer’s bad faith harmed you. Besides the benefits that were unfairly denied or delayed, there may be additional damages such as financial hardship, extra medical costs, interest, or emotional distress. The lawyer establishes how much you were harmed and how much you should be compensated.
What Remedies Are Possible If You Win a Bad Faith Insurance Claim?
Bad faith lawsuits can do more than simply force an insurer to pay what they owe. Depending on the jurisdiction and the policy, remedies may include:
- Payment of the benefits that should have been paid, plus interest
- Additional compensatory damages for losses caused by the delay or denial
- Punitive damages, where the insurer must pay extra for behavior that was particularly egregious or willful
- Recovery of your attorneys’ fees and court costs
- Sometimes statutory damages under state insurance codes or statutes (for example in Illinois under §155 of the Illinois Insurance Code)
When Should You Contact an Attorney?
If you believe your insurer is acting unfairly, you should consult with an attorney sooner than later. Here are signs that you should reach out:
- Your claim is denied even though you believe you presented all required documentation, and your condition clearly meets policy criteria.
- You’ve waited a long time without a decision, or the insurer keeps asking for unnecessary or redundant documentation.
- The insurer misstates what your policy covers or refuses to send you relevant documents.
- You’re pressured to settle for less than you believe you’re owed.
- You receive mixed or misleading communication from adjusters, claims handlers, or other parties representing the insurer.
At Bryant Legal Group, we evaluate these issues carefully. We help clients understand whether what they’re experiencing qualifies as bad faith, whether they have a legal claim, and what steps they can take to protect their rights or move their claim forward.
Limitations on Bad Faith Claims
Bad faith claims can be powerful, but they’re not available in every situation.
As noted, ERISA‑governed plans often block state law bad faith causes of action. If your LTD policy, health plan, or disability plan is employer‑sponsored and governed by ERISA, your remedies may be limited to what ERISA allows.
Different states also have different laws about what constitutes bad faith, what evidence is required, and what damages are available. States may also have statutes of limitations. Delays can mean losing your right to sue.
And ultimately, proving bad faith is harder than proving a contract claim. The bar is higher because you must show bad faith, not just disagreement.
You Don’t Have to Accept Unfair Treatment
Insurance companies have resources, teams, and processes built for protecting their bottom lines. But that doesn’t mean you must accept less than what you’re owed. If your insurer is denying valid claims, delaying without good cause, misleading you about your coverage, or otherwise acting unfairly, those may be signs of bad faith.
At Bryant Legal Group, our priority is protecting your rights and ensuring that insurers play by the rules, not by loopholes. If you suspect bad faith, you deserve clarity and justice.
Call us at (312) 313-6179 or fill out our online contact form to schedule a free consultation with one of our bad faith insurance attorneys.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.