NY's Evolving Acceptance Of Policyholder Bad Faith Claims

Law360

PUBLISHED ON: June 14, 2016

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The availability of extracontractual remedies for policyholders denied full and prompt payment of their claims is a crucial means of leveling the playing field between policyholders and the insurance industry. When a policyholder’s damages are limited to the value of the contract, insurance companies can leverage their financial clout to extract favorable settlements from policyholders who cannot bear the cost of litigation, knowing that they will never be forced to pay more than policy limits.