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.

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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.

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3
Q

First-party bad faith

A

The insurer’s mishandling of a first-party claim that can result in extracontractural damages.

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4
Q

Extracontractual damages

A

A payment awarded by a court that exceeds the usual contract damages for a breach of contract.

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