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A showing of an insurance company's disregard of facts or proof can support a claim of bad faith.
1. Though an insurance company inspected property destroyed by a fire, it did not investigate to determine the cause of the fire. Rather, the company baselessly accused its client of arson and denied the claim. A Nebraska court found the insurance company acted in bad faith.
2. An insurance company was found to be in bad faith when a worker's compensation claim was denied based on an arbitrary decision by a claims adjuster. The claims adjuster reclassified the claimant's condition from "injury" to "non-confining illness" after reading medical records, though he had neither spoke to the claimant's doctors nor called for an independent medical examination. The company offered three months' compensation. The claimant, who was unable to return to work, was seeking permanent disability benefits
3. A California court found that a commercial insurance provider of general liability insurance
acted in bad faith when it did not honestly evaluate its client's vulnerability to liability to third persons. The company also failed to accurately determine its indemnity obligation and limited its settlement under mistaken information.
4. A title insurance
company in California was found to be in bad faith because of its successive attempts to evade responsibility for its obvious negligence. The company failed to disclose about an easement on the insured's property. When the insured discovered the easement, an appraiser estimated a loss of nearly $63,000. The insurance company first denied liability. It later offered to settle for a nominal amount. It finally conducted an appraisal of the loss but only after a court found it liable.
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