Home, sweet home. That comforting phrase often extends to your place of residence but doesn't always extend to the experience of filing a property damage claim with your insurance provider.

When the unimaginable happens, such as a tree crashing onto your roof during a storm or a frozen pipe bursts flooding your basement, your insurance company should be what saves the day. 

But what happens when your insurer refuses to pay for damages that you're pretty sure should be covered? This is where the distressing concept of 'insurance bad faith' enters the scene and why it's important for policyholders to be aware of their rights and when to advocate for them. 

Dealing with property damage insurance claims and spotting potential bad faith practices is difficult to deal with. At Arnett & Arnett, PC, we will help you understand what bad faith is, how to identify it, what legal protections you have, and the steps to file a claim if you suspect your insurance company is not treating you fairly. 



Understanding Insurance Bad Faith

Insurance is more than just a business transaction; it is a legally binding contract between you and your provider. Bad faith occurs when an insurance company fails to uphold its end of the bargain by unreasonably denying a claim, delaying payment without justification, or failing to thoroughly investigate a claim.

It's a breach of the implied covenant of good faith and fair dealing that the law imposes on every contract, and it's a serious accusation in the world of insurance. 

Recognizing Potential Cases of Bad Faith 

Identifying bad faith can be tricky, as insurers are rarely bold enough to outright admit that they won't pay. Instead, signs of potential bad faith often manifest as repeated and unexplained requests for the same information, inexplicable claim denials when the policy seems to provide cover, or a general unwillingness to communicate about the claim status. 

Property Damage That May Lead to Bad Faith Claims 

Property damage comes in many forms, and insurance bad faith claims can arise in a variety of scenarios, including: 

  • Natural Disasters and Extreme Weather: High winds, flooding, earthquakes, and other natural events can cause extensive damage to your property. 

  • Fire and Smoke Damage: In the unfortunate event of a house fire, smoke and soot often cause additional damage beyond the flames. 

  • Water Damage: From leaky roofs to burst pipes, water can be a destructive force that is often complicated to prevent and repair. 

The laws and regulations regarding insurance claims and bad faith vary by state. In general, though, policyholders are protected by a 'duty of good faith and fair dealing' law, which is implied in every insurance contract.

In some states, this right is codified, allowing policyholders to sue for damages, including attorney fees and even punitive damages in certain cases. 

Statute of Limitations on Bad Faith Claims 

Be aware of the time limits when filing a bad faith insurance claim. In Arizona, the statute of limitations for filing a bad faith insurance claim is two years from the date when the act of bad faith was committed.

The Financial Cost of Bad Faith 

When insurers act in bad faith, the financial losses to the policyholder can be considerable. Missed mortgage payments, lost equity due to property devaluation, and shouldering the full burden of repair or replacement costs are just a few examples of potential costs. 

The Process of Filing a Bad Faith Claim

  • Gather Evidence and Build Your Case: The success of a bad faith claim rests on the evidence you can show a pattern of unfair treatment. This could include all correspondence with your insurer, records of payments and premiums, and even statements from third-party evaluators, such as contractors or engineers. 

  • Negotiate with the Insurer: Before resorting to legal action, it's common to engage in negotiation with the insurance company. This often involves escalating the claim within the company, identifying and addressing their objections, and working to show that your claim is valid. 

  • File a Lawsuit: If all else fails, it may be necessary to file a lawsuit for bad faith insurance practices. This process typically requires the support of a skilled insurance attorney who understands property damage law and the intricacies of the insurance industry. 

Insurance Bad Faith FAQs

Q: What are the ways in which an insurer can be held liable for bad faith? 

A: An insurance company can be held liable for bad faith if it: 

  • Fails to promptly and thoroughly investigate a valid claim. 

  • Delays payment without a reasonable explanation. 

  • Disregards the interests of the policyholder in favor of their own. 

Q: What is an example of a bad faith claim? 

A: After a hurricane, an insurer repeatedly requests the same information and documentation for a clearly covered windstorm damage claim, causing unreasonable delays in processing the claim and payment. 

Q: What is bad faith damage? 

A: Damage is considered to be 'bad faith' when it results from the insurer's unreasonable actions or neglect in handling a claim. 

Q: What are punitive damages for bad faith insurance?

A: Punitive damages, also known as exemplary damages, are designed to punish the insurer for particularly egregious conduct and to deter similar behavior in the future. 

How Can Arnett & Arnett, PC Help?

With our decades of combined experience in property damage claims and insurance law, Arnett & Arnett, PC, is your ally in navigating bad faith disputes. We have a track record of fighting for policyholders and making sure they receive the fair treatment and just compensation they are owed.  

Why Do You Need an Attorney's Help?

When you deal with a large, well-resourced insurance company, a skilled attorney can be advantageous and often essential. An attorney can level the playing field, offer advice, and speak the legal language necessary to effectively argue a bad faith case. 

Remember, your home and livelihood are at stake, and you're not alone in this battle. With insight into the warning signs and a proactive approach to your rights, you can ensure that your insurance company delivers on the promises you both made when you signed that policy. 

If you've experienced a bad faith claim denial, remember that the law is on your side. With legal counsel from seasoned attorneys who've dedicated their careers to fighting bad faith insurance practices, we can help you reclaim your peace of mind and the rightful protection that you've been paying for all along.


If you believe your insurance company is acting in bad faith after you've experienced property damage, don't wait for the situation to resolve itself. Proactive measures and swift legal action are often the keys to a just resolution. Contact Arnett & Arnett, PC at your earliest convenience, and we’ll support you through every step of your bad faith claim.