What is 'bad faith'?

What is 'bad faith'?

In California and in many states, we have a concept called the "Duty of Good Faith and Fair Dealing," because you and I can't negotiate our insurance contracts like we would negotiate other things. The insurance company gives us a piece of paper and we have to accept whatever they have. In that piece of paper is implied a covenant, and an agreement of good faith, which states that they have to look at this and deal fairly on the agreement, because it's your life. It is not just some service of fixing your plumbing. In that concept is the whole idea of bad faith. If an insurance company does not deal in good faith in interpreting their contract for you, when you're ill, or when you're dying, they have, in some cases, in isolated circumstances, the ability to be sued for bad faith. Because those people have that ability to sue an insurance company for bad faith, usually the insurance company is forced to be on a heightened standard of alert and pay for things that they should. Where people do not have the ability to sue for bad faith, you have more denials; you have more care being saved at the cost of, at the detriment of the individual who is ill.