Fact-Checked
A bad faith claim arises when an insurance company treats a valid claim as optional and delays, underpays, or denies benefits it clearly owes. After a serious accident, that stall tactic can leave you paying medical expenses and lost wages while the carrier protects its bottom line. New York does not accept this conduct as a normal part of negotiation, and the law gives injured people a way to respond.
The Law Offices of Darren T. Moore P.C. helps injured people across New York challenge insurers that mishandle honest claims. If an adjuster is delaying or denying what you are owed, our team can review your claim before you sign or settle anything.
Every insurance policy in New York is a contract, and every insurance contract carries an implied promise to act in good faith. When a carrier breaks that promise while handling your claim, you may have a bad faith claim. Unlike many states, the state does not treat insurance bad faith as a separate kind of lawsuit known as a tort.
Instead, our courts treat bad faith as a breach of the insurance contract and a breach of the implied covenant of good faith and fair dealing. That covenant is the unwritten duty to deal honestly and not strip away the coverage you paid for. The distinction matters because it shapes both what you must prove and what you can recover.
This contract-based approach has a practical effect on your case. You must tie the insurer's conduct to the specific promises in your policy, rather than rely on a broad accusation of unfairness. That focus rewards careful documentation, which we manage from the first day of a claim.
For injured people, bad faith usually surfaces during the claim itself. You expect the policy to respond after a crash or a fall, and instead the carrier disputes, delays, or denies without a sound reason.
For example, an insurer that rejects a legitimate injury claim without ever reading the medical records may be acting in bad faith. Recognizing how the state frames these bad-faith claims is the starting point for challenging that conduct.
Injured people encounter bad faith in two very different situations. The difference comes down to whose insurance company is behaving badly. The law treats these two paths, first-party and third-party bad faith, under separate rules.
Sometimes the problem is your own coverage. If you carry uninsured or underinsured motorist coverage, often shortened to UM or UIM, your insurer must step in when the at-fault driver cannot pay. No-fault benefits work the same way for early medical expenses after a crash.
A first-party bad-faith claim arises when your own carrier delays, denies, or shortchanges your benefits without a reasonable basis. Say your UIM carrier ignores clear medical records and sits on a covered claim for months, a delay that can cross into bad faith. You paid premiums for that protection, and the company owes you honest handling in return.
These disputes often follow serious crashes where the harm exceeds the at-fault driver's coverage. Your own policy serves as the safety net, yet the carrier still has a financial incentive to minimize what it pays.
Third-party bad faith involves the other side's insurer. When liability is clear and your injuries are serious, the carrier should settle within its policy limits rather than gamble at your expense. A refusal can expose its own policyholder to a judgment far beyond the coverage.
This dynamic can shift the leverage in your favor after an excess verdict because the at-fault driver may assign that bad-faith claim to you. New York sets a demanding standard for these cases, which we explain next. Either way, a carrier that games the process invites accountability.
Clear liability and severe injuries raise the pressure to resolve a claim early. When an insurer ignores that reality and refuses a fair settlement, it puts its own policyholder, and sometimes your recovery, at real risk.
Bad faith rarely announces itself. It shows up as a pattern of choices that put the carrier's interests ahead of yours. State insurance law identifies several claim-handling practices that cross the line.
Watch for the following warning signs while your claim is pending:
New York's unfair claim settlement practices law prohibits many of these behaviors, though state regulators, not private litigants, enforce the statute directly. A single slow response is not always bad faith, but a repeated pattern is a serious red flag. Any one of these tactics can signal that a valid claim is being handled in bad faith.
If these tactics sound familiar, you do not have to accept them as the cost of an insurance claim. Call The Law Offices of Darren T. Moore P.C. at (917) 809-7014 for a free case evaluation of how your claim is being handled.
New York gives injured people real tools against insurer misconduct, but the rules are specific. What you must prove and what you can collect depend on the type of bad faith involved. The standards below come straight from our state's highest court.
For a third-party failure to settle, courts apply a strict test called gross disregard. Under Pavia v. State Farm, you must show the insurer recklessly ignored a clear chance to settle within policy limits. Ordinary carelessness is not enough, because the conduct must reflect a conscious indifference to the policyholder's exposure.
Courts weigh several facts together when applying that standard. They ask whether liability was clear, whether the likely verdict far exceeded the policy limits, and whether the insurer passed up a genuine chance to settle. Those answers show whether the carrier placed its own interests ahead of its policyholder.
First-party claims follow contract principles instead. You show that the carrier breached the policy and the implied duty of good faith without a reasonable basis. Documented delay, a thin investigation, and shifting explanations all help prove the point.
A successful claim starts with the benefits the policy should have paid in the first place. Our courts also allow consequential damages, meaning the foreseeable financial harm that flows from the insurer's breach. Judges have permitted these damages beyond the policy limits when a carrier's bad faith causes losses the parties could have anticipated.
For instance, if an insurer's stalling pushes you into debt or forces you to delay needed treatment, those added harms may count as consequential damages. Punitive damages, by contrast, are rare and reserved for extreme misconduct that harms the public, not just one policyholder. We build the record needed to pursue every category that the facts support.
The right measure of damages depends on the facts of your claim. We calculate the full value of the benefits the insurer should have paid, then add the downstream costs caused by its delay. That complete picture is what drives a fair resolution, whether in settlement or at trial.
You can strengthen a potential bad faith claim long before you file anything. The goal is a clear record that shows what the insurer knew and when it knew it. A few practical steps can protect your position:
Timing also matters because a filing deadline called the statute of limitations runs in the background. A personal injury lawsuit generally must begin within a 3-year deadline, while a breach of contract claim against an insurer allows a 6-year deadline. Missing either date can end a strong claim before it starts.
The sooner you act, the more evidence our team can preserve. Early involvement also signals to the carrier that someone is watching every decision on your claim.
No. Our state treats bad faith as a breach of your insurance contract and its implied covenant of good faith, not a standalone tort.
Sometimes. Our courts allow consequential damages for foreseeable harm that an insurer's bad faith causes, which can exceed your policy limits in the right case.
Avoid recorded statements, guesses about fault, and agreeing to a fast settlement. We recommend documenting the conversation and speaking with our team before you commit to anything.
Strong claims rest on a paper trail of denial letters, delays, and a thin investigation. We gather that record and show the carrier lacked a reasonable basis for its conduct.
A personal injury lawsuit generally allows 3 years, while a contract claim against an insurer allows 6. Missing the deadline can bar your claim entirely.
Not by itself. A single low offer is common, but a pattern of delay, pressure, and refusal to investigate can point to bad-faith handling.
When an insurer treats a valid claim as optional, the delay is not only frustrating, but it can also cost you benefits you are genuinely owed. At The Law Offices of Darren T. Moore P.C., we handle these disputes for injured clients and know how carriers try to minimize their payments.
Our team documents each unreasonable delay, denial, or insufficient offer, then holds the insurer to the good-faith duty the law requires. We move quickly to protect evidence and keep your options open, whether the fight is with your own coverage or the other side's carrier.
You paid for protection, and you deserve honest handling in return. If an insurance company is mishandling your claim, contact us for a free case evaluation and a clear read on where you stand. Call (917) 809-7014 to reach our team today.
Darren Moore is the founder of The Law Offices of Darren T. Moore, P.C. and a dedicated New York personal injury attorney. Known for his relentless advocacy and client-focused approach, he has spent his career helping injury victims pursue justice and recover the compensation they deserve. Darren handles a wide range of personal injury matters and is committed to delivering personalized representation for every client.
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