In most states an insurance company has a duty to handle the claims of an insured promptly, reasonably and in “good faith”.
The duty of “good faith and fair dealing” basically means that an insurance company must:
- adjust an insured’s claim (either pay it or deny it) within a reasonably prompt time
- cooperate with you regarding the claim (timely respond to your letters and phone calls)
- tell the insured in writing precisely why it is denying the claim specifying each contract term or provision upon which it relies
- attempt to find a basis to pay the claim rather than find reasons to deny it
- "play fair” with you and the insured