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Examining the implied covenant of good faith and fair dealing

Like many in San Antonio, you may still see the value in a handshake agreement. At the same time, others may tell you that you should always "get it in writing." When it comes to dealing with insurance matters, you might think that unless your coverage stipulations are clearly and succinctly spelt out in print, you can say goodbye to the potential of being covered when you need it. Many come to us here at The Law Office of Jessica Taylor PLLC with the same assumption. The end up being pleasantly surprised to learn that even in insurance dealings, a plan provider's word may truly be its bond. 

A legal principle exists known as "the implied covenant of good faith and fair dealing." According to the Cornell University Law School, the principle requires that parties to a contract: 

  • Honor their agreements
  • Refrain from using deceit to avoid their obligations
  • Denying elements that the other parties clearly understood

This offers hope to you in pursuing a claim against your insurer, as the concept of "bad faith" may be viewed by many as being subjective. Your ability to cite the conditions of this covenant gives you concrete examples upon which to build your argument.

The implied covenant of good faith has been applied in a number of insurance cases in Texas. State supreme court rulings have used it to determine that a special relationship exists between insurers and the insured. The nature of this relationship imposes a duty on insurers to operate in good faith not as a contractual stipulation, but rather as an obligation to the law. This allows you to separate claims of bad faith from claims of breach of contract. You can learn more about the principles of both bad and good faith by continuing to explore our site. 

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The Law Office of Jessica Taylor, PLLC

The Law Office of Jessica Taylor, PLLC
14100 San Pedro Avenue
Suite 602
San Antonio, TX 78232

Phone: 210-265-6759
Phone: (210) 402-4022
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