Tort Claim or Breach of Contract Claim

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There are two major types of claims a policyholder can file against an insurance company when it is believed that company has acted in bad faith. In the event of insurance bad faith, the insured party may sue his or her insurance company on the grounds of a tort claim and/or a breach of contract claim. These two options are outlined below:

Insurance Bad Faith Tort Claim

A tort is defined as an illegal wrong that involves a breach of civil duty owed to someone else. When you enter into a legal relationship with an insurance company that company has an inherit obligation to act in your best interest. Insurance companies are expected, under penalty of law, to approach all claims in a timely and just manner. If an insurance company fails to do so they are ignoring a civil duty owed to the insured and a tort claim can be filed.

Breach of Contract Claim

The contract between an insurance company and the persons insured carries an “implied covenant of good faith and fair dealing.” This clause exists by operation of law in any and all insurance contracts. If it is believed that an insurance company has ignored this implied covenant they are in breach of contract and may be vulnerable to a breach of contract claim.

The distinction between the two types of claims is significant in terms of damages sought by the plaintiff in an insurance bad faith case. As a matter of public policy punitive or exemplary damages are unavailable in contract claims, but may be available to people filing a tort claim. In other words, in certain circumstances the insured party can seek damages larger than the face value amount of the original policy.

Tort Claim or Breach of Contract Claim

If you or someone you know feels they are a victim of insurance company’s bad faith you may be entitled to reimbursement and damages through a breach of contract or tort claim. is here to help. Our panel of attorneys includes a number of experienced and qualified insurance bad faith attorneys. If you are looking for exemplary legal help, contact today.

Tort Claim or Breach of Contract Claim
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