Last Updated: October 16, 2026
Insurance bad faith describes when an insurer acts dishonestly or unreasonably in handling your claim, conduct that is fundamentally unfair or deceptive, not just a coverage disagreement or claim denial. (Source: Tennessee Code Annotated § 56-7-105)
In practice, insurance bad faith occurs when an insurer refuses to pay a valid claim without proper investigation, ignores evidence supporting your position, or misrepresents policy terms to avoid paying benefits you're owed.
At Cummings Law Car Accident & Personal Injury Lawyers, we've worked with countless clients dealing with insurance bad faith in Tennessee after an accident or loss. Bad faith isn't just a contractual dispute, it can lead to additional damages beyond what your policy covers, and Tennessee law provides remedies when an insurer crosses the line from tough negotiation into bad faith.
Tennessee law provides specific protections against insurance bad faith through the Tennessee Code Annotated.
Under T.C.A. § 56-7-105, an insurer that engages in bad faith may be liable for additional damages.
The statute distinguishes between a simple claim denial and bad faith conduct. A refusal to pay does not automatically establish bad faith, an insurer may deny claims it reasonably believes are not covered.
Bad faith manifests in several common patterns across different types of claims.
When an insurer takes an excessive amount of time to investigate your claim without legitimate reason, this can constitute bad faith. Insurers have a duty to investigate promptly and communicate about your claim's status.
A typical bad faith delay involves an insurer sitting on your claim for months without requesting information or investigating.
Delays become particularly problematic when they cause financial hardship.
Denying a claim without a reasonable investigation is a classic example of bad faith. An insurer cannot reject your claim based on assumptions or incomplete information.
This might occur when an adjuster denies your claim after a brief phone call, without visiting the property, reviewing medical records, or examining police reports.
Bad faith denial also includes ignoring evidence you've provided.
When an insurer deliberately misrepresents what your policy covers, or falsely tells you a claim is excluded, this constitutes bad faith. Insurers cannot lie about policy terms to avoid paying claims.
For example, an insurer tells you your homeowner's policy doesn't cover water damage when your specific policy includes it. If the insurer knows the coverage exists but intentionally misrepresents it to deny your claim, that's bad faith, as is an adjuster knowingly telling you an injury isn't covered under your health insurance when it actually is.
Establishing a bad faith claim requires showing the insurer's conduct was not merely wrong, but dishonest or reckless.
To prove bad faith, you must establish two elements. First, show you had a valid claim covered under your policy, the loss was real and the policy should have paid. Second, prove the insurer acted in bad faith by refusing to pay that valid claim, meaning it either knew its position was wrong or acted with reckless disregard for whether it was correct.
The foundation of any bad faith claim is solid documentation showing both the validity of your original claim and the insurer's unreasonable conduct.
Next, gather evidence of the insurer's bad faith conduct: the denial letter, any investigation reports they relied on, and evidence their investigation was inadequate.
Photographs and written statements are powerful evidence, preserve photos showing the extent of your loss and statements from witnesses.
Create a detailed timeline showing when you submitted your claim, when you provided additional information, and when the insurer responded (or failed to respond).
Include specific dates and what happened on each. For example: "October 15, Submitted claim with photos and repair estimate; October 20, Called insurer and spoke with adjuster Smith; October 22, Received email asking for additional documentation; November 5, Submitted requested medical records; December 1, Received denial letter without explanation of why records were insufficient." This demonstrates whether the insurer's timeline was reasonable or dragged out. (Source: National Association of Insurance Commissioners (NAIC))
The timeline also exposes patterns, repeated requests for information you already provided, or claims they never received documents you can prove you sent. If you pursue a bad faith claim, this timeline becomes critical evidence of the insurer's unreasonable behavior.
| Documentation Type | Purpose | Importance |
|---|---|---|
| Original claim submission | Proves you filed timely and completely | Critical |
| Proof of loss documents | Establishes the valid claim existed | Critical |
| Correspondence with insurer | Shows what they knew and when | Critical |
| Investigation timeline | Demonstrates delays or lack of effort | High |
| Medical/repair records | Supports claim validity | High |
| Denial letter | Shows their stated reason for refusal | High |
| Evidence they ignored | Proves they disregarded your information | High |
When your insurance claim is denied, you have options beyond accepting that decision. Following a structured appeal process gives you the best chance of reversing the denial or establishing bad faith.
Your first step is carefully reading and understanding exactly why the insurer denied your claim.
Read the denial letter multiple times. Look for the specific policy language they cite. Check whether their reason matches what you believe the policy says.
Compare what the denial letter says to your actual policy. Does their interpretation of the coverage match the policy language?
Most insurance policies include an appeal process. You typically have a specific timeframe to appeal, often 30 to 60 days from the denial date, though this varies by policy and state law.
Your appeal should directly address the insurer's stated reason for denial. If they claimed the loss wasn't covered, explain why you believe it is covered, citing specific policy language.
Submit your appeal in writing and keep a copy for your records.
If the insurer denies your appeal, or if the initial denial appears to be bad faith, it's time to consult with an attorney. An experienced personal injury lawyer can evaluate whether the insurer's conduct constitutes bad faith and advise you on your options.
At Cummings Law Car Accident & Personal Injury Lawyers, we handle bad faith claims for clients across Middle Tennessee. We review the insurer's conduct, the policy language, and the evidence to determine whether you have a viable bad faith claim.
Not every claim denial constitutes insurance bad faith in Tennessee, and not every delay is unreasonable. Understanding the line between legitimate claim handling and bad faith conduct is essential.
An insurer has the right to investigate thoroughly and to deny claims it reasonably believes are not covered.
Bad faith occurs when the delay is unreasonable given the circumstances.
The key question is whether the insurer's conduct was honest and reasonable under the circumstances.
When you successfully prove insurance bad faith, you're entitled to remedies beyond simply recovering the claim amount the insurer wrongfully denied.
Under Tennessee law, a successful bad faith claim can result in several types of damages. You recover the amount of the original claim that should have been paid, plus damages for harm caused by the bad faith conduct, emotional distress, financial hardship from the delay, or costs incurred trying to resolve the dispute.
Additionally, Tennessee Code § 56-7-105 provides for statutory damages.
Some bad faith cases also result in punitive damages, reserved for the most egregious conduct.
The total recovery in a bad faith case can significantly exceed the original claim amount.
When an insurance company refuses to pay a valid claim or handles your claim unfairly, you shouldn't have to accept that decision alone.
Insurance bad faith occurs when an insurer acts unreasonably or dishonestly in handling your claim. Under Tennessee law, this includes refusing to pay a valid claim, delaying investigation without justification, or misrepresenting coverage terms. Bad faith is distinct from a simple claim denial, the insurer must act in a way that lacks a reasonable basis or shows disregard for your rights as a policyholder. Tennessee Code Annotated § 56-7-105 provides statutory remedies when an insurer engages in bad-faith practices.
Common examples include: (1) denying a valid claim without conducting a thorough investigation, (2) delaying claim investigation or payment beyond reasonable timeframes, (3) misrepresenting your policy's coverage or exclusions, (4) ignoring evidence that supports your claim, (5) failing to communicate with you about claim status, and (6) refusing to settle a claim within policy limits when liability is clear. Each situation depends on the specific facts, but the pattern is an insurer's unreasonable or dishonest conduct that harms your ability to recover.
Proving bad faith requires demonstrating that the insurer's conduct lacked a reasonable basis or was dishonest. Key evidence includes: (1) written denial letters that don't explain the reasoning, (2) documentation showing delayed or incomplete investigation, (3) expert opinions contradicting the insurer's position, (4) communications showing the insurer ignored evidence, and (5) policy documents proving coverage applies. Keep all correspondence, claim forms, medical records, repair estimates, and photos. An attorney can help evaluate whether the insurer's actions meet the legal standard for bad faith in your jurisdiction.
Under Tennessee Code Annotated § 56-7-105, you may recover the actual damages from the covered loss plus statutory bad-faith damages of up to 25% of the insurer's liability. Additional remedies can include attorney's fees, court costs, and interest. The actual amount depends on your specific case, the insurer's conduct, and what the court determines is appropriate. Damages are not automatic for every claim denial, you must establish that the insurer acted in bad faith, not simply made an error in judgment.
First, carefully review the denial letter to understand the stated reason. Gather all supporting documentation, including photos, receipts, medical records, and expert opinions that contradict the denial. File a formal written appeal with the insurer, referencing specific policy language and evidence. Keep copies of everything you submit. If the appeal is denied or ignored, contact an attorney experienced in insurance disputes. Many firms, including Cummings Law, work on contingency, meaning you pay no fees unless your case succeeds.
Yes. Tennessee law allows policyholders to sue for bad faith when an insurer acts unreasonably or dishonestly in handling a claim. You must prove the insurer lacked a reasonable basis for its actions or acted with dishonest intent. A lawsuit can result in recovery of your actual damages plus statutory penalties, attorney's fees, and court costs. Because bad-faith cases are complex and require detailed evidence and legal expertise, consulting with an attorney is strongly recommended before filing.
Contact an attorney if your claim is denied without clear explanation, the investigation seems incomplete or unreasonably delayed, the insurer misrepresents your coverage, or you believe the denial lacks a reasonable basis. Early consultation can help you understand your rights and gather evidence properly. Many personal injury and insurance dispute attorneys, including Cummings Law, offer free initial consultations and work on contingency, so you have no upfront cost to explore your options.
Cummings Law Car Accident & Personal Injury Lawyers Address: 4235 Hillsboro Pike #300, Nashville, TN 37215
