There are two types of claims commonly associated with improper tactics of insurance companies: third party bad faith insurance cases and first party vexatious refusal to pay cases.


One type of claim against and insurance company is brought about when third parties (someone who was injured by the policy holder) makes a claim for their injuries from an insured person and the insurer fails to settle a claim within the insured’s policy limits.  This may occur when an insured person injures someone (third party) in an automobile accident.  The insurance company has a duty to properly defend and indemnify its insured from lawsuits brought by the third party who was injured.   If the insurance company fails to defend and indemnify their insured, the third party may then get a judgment or verdict in court against for an amount that is more than the insured’s policy limits. RSMo 537.065 sets out a way for third party claimants to make a contract with the insured to protect the insured’s assets if the insurance company fails to do so.

Some bad faith insurance tactics may simply seem inconvenient at first, until a pattern appears. Customers report that insurance companies will repeatedly lose or misplace important documents, requiring them to fill out the same paperwork over and over. They may simply deny a claim at first, hoping that the customer will not appeal the denial. Or they may put a limitation on the time allowed for a claim, and then delay awarding the claim until that time has passed. There has been an increase in bad faith insurance tactics by automobile insurers.  Insurers have a duty to act in good faith toward their policyholders and others when handling claims.

Examples of insurance companies that bad faith include:

  • Failing to pay a claim in a timely manner;
  • Offering an amount below what the claimant is entitled to;
  • Failing to defend AND indemnify a policyholder against a third-party claim;
  • Using a policyholder’s previous claims as grounds to deny a new claim;
  • Failing to conduct a reasonable and full investigation of the claim;
  • Misrepresenting important facts or insurance policy provisions as they relate to coverage;
  • Misuse of claimants’ medical records;
  • Requiring excessive paperwork;
  • Canceling a policy after a claim is made;
  • Purposely targeting high-cost claims for denials; and
  • Ignoring expert opinion in cases where that opinion would result in a claim being paid out (such as finding that a death was suicide when a medical examiner has ruled it accidental).

Missouri law mandates that vehicle owners carry a state minimum of automobile insurance to protect other drivers in case they cause an accident.  Law abiding citizens of Missouri expect their insurance company to protect their assets by fairly evaluating cases, offering to settle within their policy limits and by putting their insured’s interests above the insurance company’s financial interests.  In short, they expect that their insurance company owes them a duty to act in good faith when evaluating claims.


Another type of claim against and insurance company is first party (the insured) claims against their own insurance company for claims they have made.  Missouri statutes 375.296 allows for additional damages for vexatious refusal to pay by the insurance company. For instance, if a policyholder has an uninsured motorist claim or an underinsured claim arising from an automobile accident in which they were injured, they may make a claim for their losses against their own insurance company. Since they are the one who has the contract with their insurance company, this is considered a “first party claim” and is known as Vexatious Refusal to pay on behalf of the insurance company.  If the insurance company acts without reasonable cause or in a vexatious manner in denying their claim, a jury may find that the insurance company is responsible for penalties and losses in a vexatious refusal to pay claim.

The laws necessary to pursue claims for bad faith or vexatious refusal to pay against insurance companies have changed significantly in the past year or so.  If an insurance company has failed to protect your assets if you’ve injured someone else OR if they’ve improperly denied a claim you made against your own insurance company, you may be eligible to file a lawsuit against your insurance company. In cases where the insurance company’s conduct is beyond unreasonable, punitive damages may be awarded.

Choose an attorney who can navigate the intricacies of the bad faith insurance area of law.  Call the attorneys at Griggs Injury Law to get help in your claim against insurance companies.