When Insurance Acts Unfairly: Understanding Auto Insurance Bad Faith in Connecticut

When you pay for auto insurance, you expect your provider to honor the policy if you're in an accident. But what happens when the insurance company doesn’t play fair? This is where the concept of “bad faith” comes in. In Connecticut, auto insurance bad faith occurs when an insurer fails to fulfill its legal duty to treat policyholders honestly and fairly.

1. What Is Insurance Bad Faith?

Bad faith happens when an insurance company unreasonably denies, delays, or underpays a valid claim. Connecticut law requires insurers to act in good faith—meaning they must promptly investigate claims, provide clear explanations for decisions, and offer fair settlements within policy limits.

2. Common Examples of Bad Faith in Auto Insurance

• Denying a valid claim without explanation
• Delaying payment unnecessarily
• Offering a settlement far below what the claim is worth
• Failing to investigate the claim properly
• Misrepresenting the policy terms
• Refusing to defend you in a lawsuit covered by your policy

3. First-Party vs. Third-Party Bad Faith

• First-party bad faith involves your own insurer (e.g., denying your collision or medical coverage claim).
• Third-party bad faith arises when your insurer fails to defend you or settle a claim brought by someone else, potentially exposing you to a lawsuit or judgment.

4. Legal Rights and Remedies in Connecticut

If an insurance company acts in bad faith, you may be able to file a lawsuit for:

• The original claim amount
• Consequential damages (e.g., out-of-pocket expenses, lost income)
• Emotional distress
• Punitive damages if the conduct was especially egregious

5. Proving Bad Faith Isn’t Easy

To win a bad faith claim, you must show the insurer acted unreasonably and without proper cause. That often requires:

• Reviewing internal insurance documents
• Consulting industry experts
• Demonstrating how the company’s conduct violated standard insurance practices

How Alan Barry &Associates Can Help

At Alan Barry & Associates, we hold insurance companies accountable when they fail their policyholders. Our legal team has extensive experience uncovering bad faith practices and pursuing full compensation for clients across Connecticut. If you suspect your insurer is acting in bad faith, don’t fight them alone. Contact us today for a free consultation and let us stand up for your rights.

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