Do damages for an insurer’s bad faith go beyond what I would be entitled to under the contract?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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Yes. In addition to what the insurer owes you under the policy (plus interest), if the denial can be shown to have been “unreasonable,” and you have been damaged by the insurer’s conduct, you might also recover “consequential damages” (monies you had to pay out-of-pocket because of the denial), and “extra-contractual damages” to compensate for mental and emotional distress, and, in some cases, “punitive” or “exemplary damages” designed to punish the insurer and deter it and its employees from wrongfully denying similar claims in the future. Not all jurisdictions allow all of these types of damages in all cases. It’s important to talk to a lawyer to determine what kinds of damages you can recover.

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