Insurance Bad Faith Lawyer Delaware | Schuster Jachetti LLP

When an insurance company fails to honor its obligations to a policyholder or claimant, Delaware law may provide a separate cause of action beyond the underlying contract dispute. Insurance bad faith claims address conduct such as unreasonable claim denials, lowball offers without investigation, unjustified delays, and failures to defend or settle within policy limits. Schuster Jachetti LLP has experience handling insurance bad faith matters in Delaware, drawing on attorney Joseph M. Jachetti’s prior decade as an insurance claims adjuster.

How Insurance Bad Faith Cases Arise in Delaware

Delaware recognizes a tort cause of action for an insurer’s breach of the implied covenant of good faith and fair dealing. The most common patterns include unreasonable denial of valid claims, refusal to settle within policy limits exposing the insured to excess judgment, failures to conduct adequate claim investigation, and improper claim handling under the Unfair Claim Settlement Practices Act, 18 Del. C. § 2304(16).

Denial of legitimate first-party claims (auto, homeowners, health, disability)
Refusal to defend or settle a third-party liability claim within policy limits
Inadequate investigation before denial
Misrepresentation of policy provisions
Compelling litigation to recover amounts owed under the policy
Unreasonable delays in payment after liability becomes reasonably clear

Prima Facie Elements of Bad Faith in Delaware

Delaware courts generally require a plaintiff to establish that the insurer’s conduct was clearly without reasonable justification. The basic prima facie elements typically include: existence of a valid insurance contract, the insurer’s denial or delay of benefits, no reasonable justification for the insurer’s conduct, and damages caused by the insurer’s bad faith conduct. The standard set forth in cases such as Tackett v. State Farm Fire and Casualty Insurance Co., 653 A.2d 254 (Del. 1995), generally requires conduct that lacks any reasonable basis.

Damages You May Be Entitled To Recover

The full policy benefits wrongfully withheld
Consequential damages caused by the delay or denial
Emotional distress damages where supported
Attorney’s fees in some circumstances
Punitive damages where the insurer’s conduct is sufficiently egregious
Excess judgments imposed on insureds in failure-to-settle cases

Statutory Framework: 18 Del. C. § 2304

The Delaware Unfair Claim Settlement Practices Act, codified at 18 Del. C. § 2304(16), enumerates conduct considered an unfair trade practice in claim handling. While the statute is primarily enforced by the Department of Insurance, the listed conduct can be evidence supporting a common-law bad faith claim. Examples include misrepresenting policy facts, failing to acknowledge claims promptly, refusing to pay claims without conducting reasonable investigation, and not attempting in good faith to effectuate prompt fair settlement when liability has become reasonably clear.

Statute of Limitations

The statute of limitations for bad faith claims in Delaware can be complex because the claim sounds in both contract and tort. Contract-based claims may be subject to the three-year statute under 10 Del. C. § 8106, while tort-based claims may be subject to a different period. Speak with a Delaware insurance bad faith lawyer promptly to preserve all available claims.

Steps to Take If You Suspect Bad Faith

Preserve all written and electronic communications with the insurer
Keep a log of phone calls, dates, and adjusters’ names
Request your complete claim file in writing
Request the insurer’s reasons for denial in writing
Avoid signing releases or recorded statements without counsel
Consult a Delaware insurance bad faith lawyer

Frequently Asked Questions

What counts as bad faith by a Delaware insurer?

Generally, conduct that lacks any reasonable basis, such as denying a claim without investigation or refusing a reasonable settlement within policy limits.

Can I get punitive damages for bad faith in Delaware?

Punitive damages may be available where the insurer’s conduct is found to be malicious, oppressive, or in conscious disregard of the insured’s rights.

Is a low settlement offer bad faith?

Not by itself. Bad faith generally requires more, such as failure to investigate or unreasonable refusal to pay where liability is clear.

Does Delaware recognize third-party bad faith?

Delaware generally recognizes bad faith claims by insureds, including in failure-to-settle scenarios that result in excess judgment exposure.

Talk to a Delaware Personal Injury Lawyer

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Reviewed by Joseph M. Jachetti Delaware Bar #003744 · Licensed December 1998 · Status: Active

This page provides general legal information only. It is not legal advice and does not create an attorney-client relationship. Past results do not guarantee a similar outcome.

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