Asked by Normaly Valdez on May 07, 2024
Verified
If an insurer in bad faith denies coverage for a claim, the insured may sue, but can recover no more than the policy's coverage limits.
Bad Faith
An intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealings.
Denies Coverage
The act of an insurance company refusing to pay out a claim on an insurance policy.
Policy's Coverage
Refers to the range of protection provided by an insurance policy against various risks or losses.
- Comprehend the responsibility of insurance companies to examine claims and the repercussions of unjustifiably denying them.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
False
Explanation :
When an insurer denies a claim in bad faith, the insured may sue for damages that can exceed the policy's coverage limits, including compensatory damages for breach of contract, and potentially punitive damages and attorney's fees.
Learning Objectives
- Comprehend the responsibility of insurance companies to examine claims and the repercussions of unjustifiably denying them.