Oklahoma bad faith law protects the public from unscrupulous claim practices. The courts apply the common law precepts of good faith and fair dealing in order to fashion remedies. The laws balance the unequal bargaining position of the parties.
An insurance company has the greater financial resources and usually a lot more sophistication in claims. To the contrary, the insured policyholder may be in a poor financial position at the time of a loss. Due to the imbalance, the courts require the insurer to act in good faith in paying claims.
The public extends to homeowners, businesses, families, and even other insurers. Generally, Oklahoma bad faith laws are in place to make sure insurance claims are promptly paid. If an insurance company acts in bad faith, then damages can be awarded.
There must be evidence of actual harm in order to recover for bad faith. There does not have to be bad faith to collect the benefits due under the insurance policy. The policy coverages are based upon contract law. Bad faith and insurance coverage are distinct, separate matters.
In addition to compensatory damages, in certain circumstances the courts will allow punitive damages, also known as exemplary damages. An award of punitive or exemplary damages is to punish any misconduct and to prevent similar misconduct in the future.
A person must also prove punitive damages.
In a bad faith case, the person filing suit will usually ask for the coverage purchased, compensatory damages for bad faith, and sometimes punitive damages. If successful in the lawsuit, there will likely be a follow up request for attorney fees and costs. The issue of attorney fees is normally a second stage after a trial. The court cannot award attorney fees until a person or entity proves its case and prevails at trial.