Insurance Bad Faith FAQs
Answers to common questions about insurance bad faith. What your insurer is allowed to do — and what crosses the line — depends heavily on your state, so the answers below link through to the law that applies where you are. This is general information, not legal advice.
Can I sue my own insurance company?
Yes. Every state we serve recognizes a claim against your own insurer for handling a claim unreasonably. New Mexico goes further than California and Arizona by also allowing a claim under the insurance statute itself, which carries attorney fees where the violation was willful.
Is a denied claim automatically bad faith?
No — and this is the most common misunderstanding. Insurers are allowed to deny claims they have properly investigated and genuinely believe are not covered. Bad faith is about whether the denial was unreasonable and whether the investigation was real, not about whether you disagree with the outcome.
What can I recover beyond the policy benefits?
Potentially the losses the denial itself caused, emotional distress, attorney fees, and punitive damages where the conduct was serious enough. The mechanisms differ by state, and the differences are substantial.
How long do I have to sue my insurer?
There is no single answer, because a bad-faith case usually contains more than one claim and they do not share a deadline. Treat the earliest plausible date as the real one and get your specific facts reviewed early.
My insurer keeps delaying. Is that bad faith?
It can be. Unreasonable delay is recognized as a form of bad faith in all three states, and a documented timeline of your calls and correspondence is usually what proves it.
What does it cost to bring a bad faith case?
Nothing up front. These matters are handled on a contingency basis for qualifying cases, and the initial review is free and confidential.
Arizona law — what people ask
Can I sue my insurance company under an Arizona statute?
No. Arizona’s unfair claim settlement practices act states expressly that it creates no private right of action — the Department of Insurance enforces it. Your claim is common-law bad faith, which in Arizona is one of the stronger policyholder claims in the country.
The insurer says my claim was fairly debatable. Is that the end of it?
Not in Arizona, and this is where Arizona differs most from other states. Fair debatability is a necessary part of the defense but not a sufficient one — the insurer must also have acted reasonably — and whether it genuinely believed the claim was debatable is usually a question for a jury rather than something resolved beforehand.
They paid eventually. Can I still bring a claim in Arizona?
Possibly. Arizona recognizes that unreasonable claims handling can amount to bad faith even where the insurer ultimately paid what it owed. A check that arrives after months of avoidable delay does not necessarily cure how the claim was handled.
Can I recover for the stress of fighting my insurer in Arizona?
Arizona allows emotional-distress damages in bad-faith cases without requiring a physical injury, which is not true everywhere. Attorney fees are also recoverable, and Arizona separately provides for fee-shifting in contested contract actions.
Are punitive damages capped in Arizona?
No. The standard to reach them is demanding — Arizona requires what its courts call an evil mind, proven to a heightened standard — but Arizona’s constitution prohibits laws capping damages, so there is no statutory ceiling once that bar is met.
How long do I have to sue my insurer in Arizona?
More than one deadline applies, and the gap between them is wide — the bad-faith tort runs on a much shorter period than a claim on the written policy. Arizona’s claims-handling rules also require an insurer to give notice when a limitations deadline is approaching, though that is a regulatory duty rather than something you can sue on.