What To Expect When You Bring a Bad Faith Claim

August 6, 2026

If your insurance company has denied, delayed, or lowballed a claim you believe was valid, you may have more than a coverage dispute. You may have a bad faith claim. Here’s a plain-language walk-through of what to expect.

What is “Bad Faith”?

Insurance bad faith occurs when your insurer fails to deal with your claim fairly and in good faith. This involves denying a claim without a reasonable basis, unreasonably delaying a claim like dragging out an investigation without justification, ignoring evidence that supports your claim, or even failing to reasonably explain a denial in a way that allows you to understand what happened.

Bad faith opens the door to damages well beyond the value of the original claim, including consequential damages, emotional distress damages, or even punitive damages designed to punish and deter the conduct. If you believe you have a bad faith claim, here is what the legal process might look like:

Step One: Documentation 

Before a bad faith claim goes anywhere, you need a record. That means you should keep every letter and email, document every phone call with the insurer, note every date something was promised and missed, and save every request for additional information along with your response. Insurers keep detailed claim files, and those files can present a limited picture.

Keeping these records allows you to document your side of the case. You can also request your complete claim file from the insurer in writing. You’re entitled to it.

Step Two: A Case Evaluation 

When you bring a potential bad faith claim to an attorney, our first job is figuring out whether the insurer’s conduct crossed the line from an ordinary coverage dispute into bad faith. This requires comparing what the policy says to the position the insurer is taking, what the insurer knew when it made its decision, and how the insurer’s conduct measures up against industry claims-handling standards.

Not every denial is bad faith, but an unreasonable denial, an unreasonable delay in paying a claim, a biased investigation, such as never asking the policyholder for/about important information, or a denial or failure to pay after the insurer ignores medical or engineering evidence helpful to your case are the kinds of things that can turn a claim dispute into a lawsuit.

Step Three: Filing and Discovery 

If the case moves forward, the lawsuit itself is often the first time the insurer’s internal conduct becomes visible. Discovery, the formal process of exchanging evidence, is where claim files, internal emails, and adjuster notes get produced. This is frequently where the real story comes out: how quickly (or slowly) the insurer actually worked the claim, what its own experts said internally versus what the policyholder was told, and whether the denial was driven by the facts of the claim or by a broader claims-handling policy.

Step Four: Trial, If It Gets There 

Most claims resolve before trial. But when an insurer refuses to acknowledge the harm it caused, a jury may need to decide. I’ve tried bad faith cases to verdict in Nevada, including a $200 million verdict against UnitedHealthcare’s Nevada subsidiary for denying a cancer patient’s physician-recommended treatment under an internal blanket policy.

Many bad faith cases involve the same underlying pattern: an insurers uses their internal process, which is built to deny and delay, and the policyholder is left holding the bill, sometimes even without the care they were medically advised.

What You Can Do 

If you think you’re dealing with bad faith, a few things help regardless of where your claim currently stands:

• Put everything in writing going forward, even if you’ve been communicating by phone.
• Ask the insurer directly, in writing, for the specific reason behind any denial or delay.
• Keep a timeline.

Finally, don’t assume a denial is final just because the insurer says so. Insurers count on policyholders not knowing their rights or not having the resources to push back. That is exactly the dynamic our justice system is built to correct.

If You Believe You’re Being Treated Unfairly 

Bad faith claims take time, and they take an attorney who understands how insurers build their claims-handling processes to survive scrutiny. If your insurer has denied, delayed, or undervalued a claim you believe was legitimate, contact the Law Office of Matthew L. Sharp to discuss your situation.