Insurance Bad Faith and Claim Delays: Understanding Your Rights

Quick answer

Insurers generally owe policyholders a duty to handle claims in good faith, but what counts as bad faith, and what you can do about it, varies by state and type of claim. Many states also regulate claims handling through unfair claims practices rules. Keep a written record, ask for status and reasons in writing, use internal escalation and your state insurance department, and consider legal advice if a claim stalls.

• A slow, low or denied claim is not automatically bad faith. The law looks at whether the insurer acted reasonably.
• Most states have unfair claims settlement practices rules, but they differ, and many do not let individuals sue directly under them.
• A written timeline of requests and responses is the most useful evidence in a delay dispute.
• Regulator complaints and internal escalation can run alongside legal options, but they do not pause legal deadlines.

Slow, low or bad faith: three different things

People use the phrase "bad faith" for many frustrations: a claim that takes months, an estimate that seems far too low, a denial that feels unfair, a company that stops returning calls. These experiences are real and worth taking seriously, but they are not all the same thing legally, and treating them as if they were can lead to disappointment.

A slow claim may simply be complicated, waiting on records, or affected by a large event that overwhelms an insurer. A disputed claim is one where you and the insurer honestly disagree about coverage, cause or value. Bad faith, in the legal sense, generally means that an insurer acted unreasonably or dishonestly in handling a claim, for example by ignoring evidence, making baseless demands, misrepresenting the policy or stalling without a legitimate reason. What exactly qualifies, and what remedies exist, is decided mostly by state law and differs widely.

This guide explains the concepts in plain language, describes how state unfair claims practices rules work, and offers practical steps when a claim seems stuck. It cannot say whether any particular insurer acted in bad faith. That depends on the facts, the policy and the law of your state. If you believe your situation is serious, a licensed attorney in your state can evaluate it.

The duty of good faith and fair dealing

In most states, insurance contracts carry an implied duty of good faith and fair dealing. In general terms, this means an insurer must deal honestly and fairly with its policyholders, investigate claims reasonably, evaluate them on their merits and not place its own interests above the insured's in an unreasonable way. The details, including how the duty is enforced and what damages are available, differ by state, and some states recognize it through court decisions while others rely more on statutes.

Two settings are commonly distinguished:

• First-party claims. You claim under your own policy, for example for property damage or a disability benefit. The insurer's duties to you arise from the contract and from state law.
• Third-party claims. You are making a claim against someone else's insurer. The insurer's duties generally run to its own policyholder, and a claimant usually cannot sue the other driver's insurer for bad faith in the same way. Some states allow limited claims or regulate the insurer's conduct toward claimants by statute.

Our overview of how insurance and injury claims work explains the difference between these two kinds of claims.

Unfair claims settlement practices laws

Most states have laws or regulations that prohibit unfair claim handling. Many are based on model laws published by the National Association of Insurance Commissioners (NAIC), including its Unfair Claims Settlement Practices Act. The NAIC model states that its purpose is to set standards for the investigation and disposition of claims under policies issued to residents of the state. It lists practices that are considered unfair when committed or performed with sufficient frequency to indicate a general business practice, and it provides for regulatory proceedings by the state insurance commissioner.

Examples of practices that the model identifies include:

• Failing to acknowledge and act reasonably promptly on communications about claims.
• Failing to adopt and implement reasonable standards for the prompt investigation of claims.
• Refusing to pay claims without conducting a reasonable investigation.
• Failing to affirm or deny coverage within a reasonable time after proof of loss is submitted.
• Not attempting in good faith to settle claims promptly and fairly when liability has become reasonably clear.
• Compelling policyholders to start lawsuits to recover amounts due by offering substantially less than the amounts ultimately recovered.
• Failing to provide forms needed to present claims within fifteen calendar days of a request, with reasonable explanations of their use.

Two cautions. First, a model law is not the law of your state. States adopt versions with different wording, different time periods and different enforcement. Second, the NAIC model states that nothing in it should be construed to create or imply a private cause of action for violation of the act, and many states follow that approach: the rules are enforced by the regulator rather than by individual lawsuits. Other routes may exist in your state, through court decisions or other statutes, which is another reason to check your state's law or ask an attorney.

Behavior that may raise concern

It is useful to know what ordinary claim handling looks like and what might be worth documenting more carefully. Examples that some policyholders find concerning include:

• No acknowledgment of a claim within the period your state expects.
• Repeated requests for documents you have already provided.
• Explanations that change from one conversation to the next.
• A denial that does not cite any policy language or does not match the policy.
• An estimate that ignores items you documented, without explanation.
• Long periods of silence, or an adjuster who never responds to messages.
• Pressure to accept a quick payment or sign a release before damage or treatment is fully known.
• Statements about the policy that contradict the written policy.

None of these, by itself, proves bad faith. A single delay may have an innocent explanation. What matters is whether there is a pattern and whether the insurer has a reasonable basis for its position. That is why careful records are so valuable.

Honest disagreement is not bad faith

Insurers are allowed to disagree with policyholders. In many states, courts have held that an insurer does not act in bad faith merely because it denies a claim or values it differently, if it had a reasonable basis for its position, sometimes described as the claim being "fairly debatable." The exact standard differs by state, and it does not protect an insurer that failed to investigate properly or ignored key evidence.

For you, this means that the best response to a disagreement is usually to strengthen the record: provide evidence that answers the stated reason, ask the insurer to explain its position in writing and ask for the policy language it relies on. Our guide to why insurance claims are denied describes how to read a denial and build a response.

What delay looks like, and when it matters

There is no single national clock for claims. Many states set time periods for acknowledging a claim, requesting additional information and accepting or denying a claim after proof of loss, and the periods differ. Disasters, complex investigations, missing records and the claimant's own delays can all lengthen timelines legitimately, and some states extend deadlines after declared catastrophes.

A more useful question than "how long has it been?" is "what is the explanation?" An insurer that tells you what it is waiting for and follows up is acting differently from one that does not answer. If you are unsure what your state expects, your state insurance department's consumer pages usually explain required response times in plain language, and the NAIC directs consumers to their state departments through its consumer site.

Liability claims and failure to settle

There is one more area worth knowing, even briefly. When you are sued and have liability insurance, the insurer controls the defense and settlement under many policies. If a claimant offers to settle within your policy limits and the insurer unreasonably refuses, and a judgment later exceeds those limits, some states allow the policyholder to hold the insurer responsible for the excess. The rules differ significantly by state and are fact-specific. If you are sued and face a claim that could exceed your coverage, it is reasonable to consult a licensed attorney promptly, and to communicate with your insurer in writing.

What to do if a claim stalls

1. Build a timeline. List each date you reported the claim, each request from the insurer, each response and each call, with names and reference numbers.
2. Ask for status and reasons in writing. Send a short, polite message asking what is outstanding, what decision is pending, and when you can expect a response. Ask the insurer to identify any policy provision it is relying on.
3. Respond to requests promptly and keep proof of what you send. Delay on your side can complicate any later dispute.
4. Escalate internally. Ask for a supervisor or the insurer's complaint or appeals process, and keep the same records.
5. Contact your state insurance department. The NAIC explains that delays, denials and unsatisfactory settlements are among the most common reasons for complaints, and that you can start at its consumer site to find your state. See our guide to filing a complaint with your state insurance regulator.
6. Check your deadlines. Policy time limits and statutory periods can continue to run while you wait. See our explainer on statutes of limitation and claim deadlines.
7. Consider legal advice. A licensed attorney can tell you whether your facts may support additional claims under your state's law and what they would involve.

What remedies might exist

Remedies depend entirely on the state and the facts, so this is a general overview rather than a forecast. Depending on the jurisdiction, possibilities may include payment of the benefits owed under the policy, interest, recovery of certain costs, and, in some states and circumstances, additional damages or attorney's fees. Some states allow claims for extra-contractual damages in limited situations, and some do not. Regulators may require corrective action or impose penalties on insurers, but they generally do not award damages to individual policyholders.

It is also worth noting that pursuing these options can be slow and uncertain. That is one reason why documenting carefully, using internal review and regulator channels, and getting advice early are commonly recommended.

Documentation that helps

• A written timeline of dates, contacts and requests.
• Copies of the policy, declarations page and all endorsements.
• All letters, emails, portal messages and estimates, saved in their original form.
• Proof of everything you sent, including delivery confirmations.
• Notes of each call, with names and what was said.
• Photographs, invoices and other evidence of your loss.
• Any regulator complaint number and correspondence.

Our guide to how to document a claim explains how to organize these records.

Communicating with the insurer during a delay

Tone and structure matter when a claim is slow. Keep every message short, specific and polite, and reference your claim number and the dates of earlier contacts. Ask direct questions: what has been received, what is still needed, who is handling the file and when a decision is expected. If the adjuster changes, send the new adjuster a brief summary of where matters stand, with a list of the documents already provided.

Avoid threats, sarcasm and speculation about motives, which tend to make communication less productive and do not help the record. If you call, follow with a short email confirming what was said. If the insurer asks for more time, ask for the reason and a new date in writing. Calmly documented communication shows what you did and when, which is exactly what a supervisor, a regulator or an attorney will want to see later.

Example scenario (hypothetical)

A homeowner reports water damage, and the insurer acknowledges the claim. Six weeks later the adjuster has not inspected, and each call produces a different explanation. The homeowner writes down each contact, then emails a request for the inspection date, the documents still needed and the policy sections the insurer is considering.

When the insurer responds with a further information request for documents already supplied, she resends them with a cover note listing earlier dates. She asks for a supervisor, and when a month passes without a decision, she files a complaint with her state insurance department, attaching her timeline. At the same time she notes the suit-limitation language in her policy and asks a licensed attorney how it applies. She does not assume bad faith, and she does not assume it is impossible; she builds a record that lets others assess it.

Common mistakes

• Assuming every delay is bad faith, and missing ordinary reasons or missing paperwork on your side.
• Relying on phone calls with no written follow-up.
• Posting accusations online instead of documenting facts.
• Missing policy and legal deadlines while waiting for the insurer.
• Refusing reasonable requests for information.
• Threatening legal action without understanding the options, which can make communications less productive.
• Signing a release or accepting a partial payment as final without reading it.
• Not involving the regulator when it could help.

A checklist for a stalled claim

1. Build a dated timeline of everything that has happened.
2. Confirm that you have answered every request with proof of delivery.
3. Send a written status request and ask for the policy provisions being relied on.
4. Use the insurer's internal escalation process.
5. Learn your state's expected response times from the insurance department.
6. File a regulator complaint if progress stalls.
7. Identify and calendar policy and legal time limits.
8. Consider a consultation with a licensed attorney, especially for large or serious claims.

When legal help may be appropriate

If a large or long-delayed claim is unresolved, if an insurer has denied coverage you believe applies, if you face a liability claim that might exceed your limits or if you are close to a deadline, consider consulting a licensed attorney in your state. Ask about fees early; our guide to attorney fees explains common arrangements, and finding and vetting a licensed attorney explains how to check credentials. USA.gov lists free and low-cost legal help programs for people who qualify.

Frequently asked questions

Is a claim denial the same as bad faith?

No. An insurer can deny a claim and be correct, or be mistaken without acting in bad faith. Bad faith concepts generally focus on whether the insurer acted unreasonably, for example by not investigating, delaying without reason or ignoring policy terms, and standards differ by state.

Can I sue my insurer directly under the state's unfair claims practices law?

In many states, unfair claims practices laws are enforced by the state insurance regulator and do not give individuals a private right to sue under them. The NAIC model act itself states that it does not create a private cause of action. Some states allow other claims, so ask a licensed attorney about your state.

How long does an insurer have to respond?

It depends on the state and the type of claim. Many states set time periods for acknowledging a claim, requesting information and deciding, and they vary. Your state insurance department's consumer pages usually state them.

When to consult a licensed attorney

This article is general information. It cannot account for the facts of your situation, the wording of your policy or contract, or the law where you live. Consider speaking with an appropriately licensed attorney in your jurisdiction if any of the following applies:

• A deadline may be running, or you are unsure whether one applies.
• You have been seriously injured, or a large amount of money or property is involved.
• You have been asked to sign a release, waiver or settlement agreement.
• A claim has been denied and you do not understand why, or you believe you are being treated unfairly.

Legal aid organizations, bar association referral services and court self-help centers may offer free or low-cost help. See our guide to finding and vetting a licensed attorney.

Important legal notice

Verdicairn is an independent informational publication, not a law firm. Content is general educational information, not legal advice, and reading it does not create an attorney-client relationship. Laws vary by jurisdiction and change over time, so information may be out of date. For advice about your situation, consult an appropriately licensed attorney. Read the full disclaimer.

Sources and further reading

1. Unfair Claims Settlement Practices Act (Model 900) — National Association of Insurance Commissioners. Accessed September 29, 2026
2. How to File a Complaint and Research Complaints Against Insurance Carriers — NAIC. Accessed September 29, 2026
3. Consumer resources — NAIC. Accessed September 29, 2026
4. Find a lawyer for affordable legal aid — USA.gov. Accessed September 29, 2026

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