Transcript:
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Bad faith is a very specific term. It's a referral to propensity of insurance companies to not act in good faith in the execution of the insurance contract that they have with their insured. And so there are primarily two different ways that that occurs. One is a context where an insured is in a car crash. it's their fault and the insurance company when given an opportunity to settle the claim within their policy limits does not accept that opportunity to tender the policy or to to settle a claim
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within the policy limits and then the the plaintiff's lawyer and the plaintiff prosecute the claim and get a verdict that's larger than the actual policy that was that the insurance company was given an opportunity to settle for. The other way you have bad faith is where you have a first party insured and the insurance company is treating their own customer directly in a way that's in contrast to the spirit of the contract which is all contracts whether it's insurance company or some contract that
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you have with another individual. Both parties who are members who are contractually bound that they're in what's called privity with each other have an obligation to act in good faith in furtherance of the interests of the people who are on that contract. And so if an insurance company isn't following their obligations to a first party insured, then they can be uh said to be acting in bad faith. And it's a very very deep area of law. I'm just giving a very thumbnail assessment of the two
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broad areas of bad faith that can exist.
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