Bad Faith Refusal to Settle

Though rarely asserted, there is such a claim as suing an insurance for bad faith for failure to settle a claim. Zumwalt v. Utilities Insurance Co., 228 S.W.2d 750, (Mo. 1950). This is technically different than a statutory vexatious refusal to pay claim. What constitutes “bad faith” for purposes of this claim? As a general matter, you cannot pursue an action against the insurer for an amount in excess of the policy limits, unless the insurer is guilty of fraud or bad faith. Id. at 753. Bad faith is a state of mind indicated by acts and circumstances; it is the “intentional disregard of the financial interests of the plaintiff in the hope of escaping full responsibility imposed upon it by its policy.” Acting in bad faith is more than acting negligently. Freeman v. Leader National Insurance Company, 58 S.W.3d 590, 598 (Mo. Ct. App. 2001). 
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