Insurance Claim — Breach of Good Faith Duty in Ramat Gan
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What is the Duty of Good Faith in Insurance Contracts?
The duty of good faith is a fundamental legal obligation that applies to every party in an insurance contract — both the insured and the insurance company. On the part of the insurance company, this obligation means that it must act with honesty, transparency, and without arbitrary or deceptive conduct toward the insured. The duty of good faith is not inherently defined in the text of the law, but rather derives from fundamental legal principles in Israeli contract law.
When an insured suffers damage — whether it is a motor vehicle accident, workplace accident, or any event covered by the policy — their natural right is to receive fair compensation in a reasonable time. The insurance company, for its part, is obligated to examine the claim in good faith, assess the damage fairly, and not reject or delay without a genuine reason. A breach of this obligation can constitute a separate cause of action in addition to the original claim for compensation.
How Can Insurance Companies Violate the Duty of Good Faith?
- Arbitrary rejection of a claim: An insurance company that rejects a claim without genuine investigation or based on weak justification that does not meet legal criteria violates its obligation.
- Unjustified delay: When a company delays a decision on approval or claim rejection for months or years without actively investigating, this is an unjustified delay.
- Unnecessary information requests: Repeated requests for the same information, or demands for documents unrelated to the claim, may be considered bad faith conduct.
- Attempting to reduce the compensation amount in a deceptive manner: Presenting misleading medical or financial assessments, or disregarding different professional opinions, may constitute a breach.
- Failure to provide explanations: When a company rejects or reduces compensation without a clear and substantiated explanation, the insured is left in the dark and the company evades accountability.
- Exerting unfair financial pressure: Attempting to coerce the insured into accepting a lower amount through threats or deliberate delays.
In any such case, the insured can file an additional claim on top of the original claim, and this is a claim for breach of the duty of good faith.
Policyholder Rights Against Breach of Good Faith Obligation
The Israeli legal system protects policyholders in several ways. First, under insurance law, an insurance company that has breached its good faith obligation may be sued in a civil lawsuit and may be required to pay compensation — not only for the original damage, but also for additional damages resulting from the breach, such as legal costs, lost income due to delay, or even non-pecuniary damages (such as emotional suffering).
Second, in a claim for breach of good faith obligation, the policyholder does not always have to prove that the company acted with malicious intent. It is sufficient to prove that the company did not act in good faith — that is, that its conduct was negligent, arbitrary, or deceptive. This is a lower standard of proof than malice.
Third, in some cases, courts have imposed full legal costs on insurance companies that breached this duty, to emphasize the severity of the breach. This means that the policyholder not only receives the compensation owed to them, but also their legal costs from the insurance company.
The Process of Filing a Claim for Breach of Good Faith Obligation
When a policyholder comes to an attorney claiming that an insurance company has breached its good faith obligation, the process typically begins with a thorough review of all documents — the policy, the original claim, correspondence with the company, denial or suspension decisions, and medical or financial assessments. An experienced attorney will identify whether a breach has indeed occurred, and if so — what damage has been caused.
Following that, a formal demand letter is typically sent to the insurance company, detailing the breach and requesting compensation. If the company does not respond favorably, or if negotiations fail, a lawsuit may be filed in court. In such a lawsuit, the policyholder (through their attorney) must prove that the company breached its obligation and what economic damage has been caused.
Insurance Claim Services in Ramat Gan
Representation in Claims for Breach of Good Faith Obligation
Attorney Mendelbaum represents policyholders in comprehensive claims against insurance companies that have breached their good faith obligation. Thorough review of all documents, legal assessment of the breach, precision in calculating damages.
Negotiation with Insurance Companies
Often, a formal and clear demand from an attorney encourages an insurance company to settle out of court. We negotiate forcefully and efficiently to achieve a fair settlement amount.
Court Representation
If negotiations fail, we file a lawsuit in court and represent you until the proceedings are concluded. Experience since 2008 in tort law and insurance law.
Damage Assessment in Insurance Claims
Accurate calculation of all damages — the original damage, legal costs, lost income, non-pecuniary damages. The data serves as the basis for the demand and the claim.
Legal Advice on Insurance Matters
If you are uncertain about your rights as a policyholder, or if you want to understand your policy, an attorney can provide clear and focused advice.
Guidance in the National Insurance Process
In addition to a claim against the insurance company, there is often also entitlement to compensation from national insurance. We guide you through both processes simultaneously.
Examples of Cases Where There is a Breach of the Duty of Good Faith
| Scenario | Insurance Company Conduct | Is This a Breach? | Explanation |
|---|---|---|---|
| Traffic Accident | Rejection of the claim without investigation, or rejection based on an allegation that was not examined | Yes | An insurance company is obligated to investigate every claim in good faith. Rejection without investigation is a clear breach. |
| Work-Related Accident | Delay in decision-making for a year, without explanation or progress | Yes | Unjustified delay is a breach. An insurance company must investigate within a reasonable timeframe. |
| Personal Injury | Repeated requests for the same medical opinion, or requests for unrelated documents | Yes | Redundant or repeated requests constitute conduct lacking good faith. |
| Economic Compensation | Presentation of misleading medical assessment or disregard of other professional opinions | Yes | An insurance company must evaluate fairly. Disregard or bias is a breach. |
| Settlement Negotiations | Attempt to impose a low amount under threat or following intentional delay | Yes | Unfair economic pressure is a breach of good faith. |
How Long Do You Have to File a Claim for Breach of the Duty of Good Faith?
A claim for breach of the duty of good faith is subject to the statutes of limitations. Generally, the period for filing a tort claim is three years from the date on which the injured party knew (or should have known) of the breach. However, every case is different, and there are circumstances in which the period can be extended or restart. This is where immediate legal consultation is essential — so as not to miss the deadline.
Frequently Asked Questions About Insurance Claims and Breach of the Duty of Good Faith
Why Choose an Experienced Insurance Claims Attorney?
A claim for breach of good faith is not a simple claim. It requires deep knowledge of insurance law, tort law, current case law, and the ability to analyze complex legal documents. Mandelbaum, Gor, Witsman-Gor & Co. has specialized in tort claims since 2008, investing many years in understanding the dynamics between policyholders and insurance companies. We know how insurance companies think, what they fear, and how to fight them effectively.
Additionally, an experienced attorney can identify breaches that you might not see yourself. For example: if a company requested information that was not relevant, or if it ignored professional opinions, an attorney will identify this and use it as evidence. Furthermore, we know how to accurately assess damages—not only economic damages, but also non-economic damages (suffering, anxiety, loss of dignity), which are often greater than the economic damage itself.
In Ramat Gan, Mandelbaum's office is known for strong representation of claimants in tort and insurance claims. We work with complete transparency, keep the client updated at every stage, and always put the client's interests first and foremost.
First Steps — What to Do Now?
If you suspect an insurance company has breached its duty of good faith, or if your claim is pending and stalled, your first step should be to contact an attorney. Mandelbaum's office offers a free initial consultation, where you can speak with an attorney and learn whether you have a strong case. In this meeting, we will review all your documents, hear your story, and give you an honest assessment of your chances of success.
If you decide to proceed, we will handle all the details—from the formal demand to the insurance company, through negotiations, and up to filing a lawsuit in court if necessary. You will not be alone in this process.
Mandelbaum, Gor, Witsman-Gor & Co. is located in Ramat Gan and represents victims from throughout the region. Call today to schedule a consultation.
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