When an insurance company refuses to deal fairly with a policyholder, the consequences can be devastating. For injured people already dealing with physical, emotional, and financial strain, acting in bad faith by an insurer can have a profound impact. Grover Law Firm helps clients understand what to expect when fighting an insurance bad faith claim and how Canadian law protects policyholders from unfair treatment.
Insurance contracts are built on trust. When that trust is broken through bad faith practices, legal action may be necessary to restore balance and pursue accountability.
Understanding Insurance Bad Faith Under Canadian Law
In Canada, insurers owe policyholders a duty of good faith and must act with utmost good faith throughout the claims process. This obligation arises from the contractual relationship between the insurer and the insured and is reinforced by Canadian law and the Insurance Act.
Bad faith insurance occurs when an insurer places its own financial interests ahead of fair treatment of the insured. Courts recognize bad faith as a separate actionable wrong, meaning an insurer can face consequences beyond simply paying the claim.
What Constitutes Bad Faith Insurance Practices?
Bad faith insurance practices take many forms. An insurer may be considered to be acting in bad faith when it:
- Unreasonably delays the claims process
- Fails to properly investigate claims
- Denies coverage without a valid reason
- Makes unreasonable demands for information
- Attempts to avoid paying valid claims
- Misrepresents policy language or policy terms
These actions go beyond ordinary disputes and may be considered bad faith when they violate standards of fair dealing and fair treatment.
Common Bad Faith Tactics Used by Insurers
Many bad faith claims arise from repeated patterns of conduct within the insurance industry. Common bad faith tactics include:
- Delayed investigations without justification
- An adjuster refuses to review relevant documents
- Insurer denies a legitimate claim without explanation
- Ignoring accident reports or police reports
- Applying excessive financial pressure to force settlement
These practices are not simple mistakes. When proven, they may justify additional legal remedies.
The Difference Between Denied Claims and Bad Faith
Not every denied insurance claim amounts to bad faith. Insurers are allowed to deny claims when there is a valid reason under the insurance policy. However, bad faith arises when the insurer denies claims dishonestly, recklessly, or without proper investigation.
Courts examine whether the insurer acted reasonably, handled the claim in a timely manner, and respected its duty of good faith. A denial made to avoid paying rather than based on policy terms may constitute bad faith.
Proving Bad Faith in an Insurance Claim
Proving bad faith requires more than showing that the insurer was wrong. Evidence may include:
- Unreasonable delays in the claims process
- Internal insurer communications
- Failure to investigate claims properly
- Inconsistent explanations for denial
- Ignoring medical records or accident reports
Gather evidence early, including all correspondence, claims notes, and policy documents. This information is critical to proving bad faith.
The Legal Process for Bad Faith Insurance Claims
The legal process often begins with a careful review of the insurance policy and claims history. Legal representation is essential to assess whether the insurer’s conduct crossed the line into bad faith.
A bad faith insurance lawyer may pursue legal action seeking damages beyond the original claim, including compensation for harm caused by the insurer’s conduct.
Types of Damages Available in Bad Faith Claims
When bad faith is established, courts may award several forms of damages, including:
- Actual damages related to the original loss
- Compensatory damages for emotional distress
- Punitive damages to punish egregious conduct
- Such damages as necessary to deter future misconduct
Punitive damages are particularly significant and reflect the seriousness with which courts treat bad faith insurance behaviour.
Bad Faith in Personal Injury and Disability Claims
Bad faith frequently arises in personal injury matters and long term disability claims, where delays or denials can leave injured plaintiffs without income or medical support.
In personal injury claims, insurers may challenge medical treatment, dispute causation, or delay resolution to pressure claimants. These tactics may be considered bad faith when they go beyond legitimate dispute.
The Insurer’s Duty Throughout the Claims Process
An insurer’s duty does not end when a claim is filed. The insurer’s duty includes:
- Acting promptly
- Investigating claims fairly
- Communicating honestly
- Respecting policy language
- Treating claimants with fairness
Failure to meet these essential aspects of fair dealing may expose the insurer to additional liability.
Insurance Disputes and Legal Options
Insurance disputes involving bad faith often require court involvement. A trial judge will assess the insurer’s conduct, motivations, and treatment of the injured plaintiff.
Legal options may include negotiated resolution, mediation, or litigation depending on the severity of the conduct and the insurer’s response.
Why Legal Representation Matters
Bad faith claims are complex and insurer-funded defence teams are experienced in resisting accountability. Personal injury lawyers with experience in insurance disputes understand how to expose unfair insurance practices and protect clients’ rights.
A bad faith insurance lawyer ensures the insurer is held to its obligations under Canadian law and that policyholders are not forced into unfair outcomes.
What You Can Do if You Suspect Bad Faith
If you believe an insurer is acting unfairly:
- Act promptly
- Gather evidence and preserve communications
- Request written explanations for delays or denials
- Seek legal advice before accepting settlement offers
Early intervention can significantly affect the outcome.
Why Grover Law Firm Can Help
Grover Law Firm represents clients facing unfair insurance practices and understands how bad faith claims unfold in Canada. Our legal team focuses on protecting injured people from insurer misconduct and pursuing accountability when insurers breach their duty of good faith.
We understand the financial and emotional strain these disputes create and work to secure outcomes that reflect fairness and justice.
Get Guidance When an Insurer Acts Unfairly
When an insurer refuses to act in good faith, you do not have to accept it. Grover Law Firm helps clients challenge bad faith practices and pursue meaningful results under Canadian law.
If you believe your insurer has acted unfairly, call Grover Law Firm at (403) 253-1029 to request a free consultation and discuss your options.