Chapter 5 Flashcards
1
Q
Detrimental reliance
A
A situation in which an insured relies on the words or actions of an insurer and that reliance harms the insured’s financial position.
2
Q
Declaratory judgment action
A
A legal action in which the insurer (or insured) presents a coverage question to the court and asks the court to declare the rights of the parties under the applicable insurance policy.
3
Q
First-party bad faith
A
The insurer’s mishandling of a first-party claim that can result in extracontractural damages.
4
Q
Extracontractual damages
A
A payment awarded by a court that exceeds the usual contract damages for a breach of contract.