Bad Faith Litigation

Bad Faith Claims We Defend

First-party claims typically allege that an insurer unreasonably denied, delayed, or underpaid a claim made by its own insured under a homeowners, automobile, UM/UIM, or commercial policy. Third-party claims usually arise after an excess verdict or judgment, when the insured or an assignee alleges the carrier failed to protect the insured by accepting a reasonable settlement offer within limits.

We also defend extra-contractual claims that grow out of coverage disputes, including cases brought after a stipulated judgment and assignment. Where appropriate, the firm works alongside separate coverage counsel so that the defense of the insured and the insurer's own coverage position remain properly separated.

Defending the Claim File

Every bad faith matter begins with the complete claim file and a timeline of decisions, communications, and reserve changes. From that review, the carrier receives an early case evaluation that identifies what the file shows, where the exposure lies, and whether early resolution is in its interest.

Bad faith cases turn on what the adjuster knew and when. Our attorneys identify the key decision points, prepare claim professionals for deposition, and retain claim handling experts when the reasonableness of the insurer's conduct is in dispute.

Reports are written for claim and legal leadership, with a statement of risk, a recommended strategy, and a litigation budget. Privilege and work product disputes arise regularly in bad faith discovery, and the firm raises them early so the carrier can address them deliberately.

Thomas Rubin & Kelley PC prepares each case to present the claim decisions to a jury in the context the adjuster faced at the time. That preparation also strengthens the carrier's position at mediation.

Issues That Shape Bad Faith Cases

Bad faith cases are decided on the claim file. Juries examine what the adjuster knew, when the adjuster knew it, and how each decision was documented, so we review the full timeline of investigation, evaluation, reserves, and communications before forming a defense. Punitive damages allegations are common in these cases, and Punitive Damages in Negligence Cases provides further reading on that subject.

Many third-party bad faith claims follow a stipulated judgment and an assignment of the insured's claims, entered either after a carrier declines to defend or while it defends under a reservation of rights. Our attorneys handle these assigned claims, including disputes over the reasonableness of the underlying settlement, and we advise carriers on how their coverage positions will be viewed if one of these agreements follows.

Claim handling standards under Arizona's Unfair Claims Settlement Practices Act, A.R.S. §20-461, frequently surface in discovery and expert testimony, and we prepare claim professionals to address them. Two practical questions come up often: how much of an evaluation an adjuster shares with a claimant, and how quickly counsel is retained once an insured is sued. For further reading, see Do Adjusters Have to Disclose the Settlement Range Placed on a UM/UIM Claim? and Insurers Should Retain Counsel Early to Avoid Default Judgments.

Claim Handling Counsel

Much of the value we provide comes before litigation. Our attorneys advise carriers on responding to time-limited policy limits demands, documenting coverage positions, issuing reservation of rights letters, and handling claims where the insured faces exposure above the limits.

Discussing a Bad Faith Matter

For a bad faith claim, a demand that may create extra-contractual exposure, or a claim handling question, our attorneys are available at (602) 274-8289 and through the contact page. We represent insurers in Arizona state and federal courts.