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Unintended Consequences of the tort Bad Faith   

https://zalma.com/blog 

In a typical contract, one party has a duty to perform (construct a  building, deliver goods, convey real estate, pay indemnity) and the  other party has a duty to pay money or perform a task.  Breach by the  performer may take the form of nonperformance, defective performance, or  delay in performance. The primary purpose of damages for breach of a  contract is to protect the promisee\\u2019s expectation interest in the  promisor\\u2019s performance.  Damages should put the plaintiff in as good a  position as if the defendant had fully performed as required by the  contract. Damages should never provide a profit to the non-breaching  party.  Insurance, like all parts of modern society, is subject to the  deprivations of the law of unintended consequences. In the USA alone  people pay to insurers more than $1.2 trillion dollars in premiums and  insurers pay out in claims as much or more than they take in. Profit  margins are small because competition is fierce and a year\\u2019s profits can  be lost to a single firestorm, earthquake, hurricane, flood or  unexpected bad faith law suit.  Neither the courts nor the governmental agencies seem to be aware that  in a modern, capitalistic society, a healthy and viable insurance is a  necessity.  No person would take the risk of starting a business, buying  a home or driving a car without insurance. The risk of losing  everything would be too great. By using insurance to spread the risk  among all the costs of taking the risk to start a business, buy a home  or drive a car becomes possible. The persons insured are dependent on  their insurer to take the risk the insureds are not willing to take  alone.  Insurance contracts can be simple or exceedingly complex, depending upon  the risks taken by the insurer. Regardless, insurance is only a  contract whose terms are agreed to by the parties to the contract.  \\xa9 2021 \\u2013 Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and zalma@zalma.com.  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \\u2013 https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4