Some states, like California, allow insureds to sue their insurance companies for damages for emotional distress and even punitive damages (damages to punish) if the insurance company denies their claim “in bad faith and without proper cause.” Some of these lawsuits result in million or multi-million dollar judgments.
Other states don’t allow these actions, and an insured’s only remedy is to sue for whatever benefits the policy itself would provide.
Which is the correct approach?
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