Bad Faith Insurance Lawyer in Hawaii: When Your Insurer Breaks Its Promise
Big Island individuals and businesses trust William Dean to hold insurance companies accountable for delaying, lowballing, and wrongly denying claims, day or night.
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You Paid Your Premiums: They Owe You Good Faith
Every insurance policy in Hawaii comes with an unwritten promise: the insurer will deal with you fairly and in good faith. When an insurance company ignores that promise, by stalling, refusing to investigate, twisting policy language, or denying a claim it knows is valid, the harm can go far beyond the unpaid claim.
Ohana Law Firm represents Hawaii Island policyholders against insurers that cross the line. As a bad faith insurance lawyer in Hilo, William Dean evaluates how your insurer handled your claim, gathers the evidence, and pursues the full range of damages Hawaii law allows through demand, negotiation, mediation, or a lawsuit in Hawaii Third Circuit Court.
Not every denied claim is bad faith, and we will tell you honestly which side of the line your case falls on. Every case is unique, and past results do not guarantee future outcomes.
What Is Insurance Bad Faith in Hawaii?
Insurance bad faith happens when an insurer breaches its duty of good faith and fair dealing in handling a claim. In Best Place, Inc. v. Penn America Insurance Co. (1996), the Hawaii Supreme Court recognized the tort of bad faith in the first-party insurance context. That means a policyholder can bring a claim separate from, and in addition to, a claim for breach of the insurance contract.
Interestingly, the Best Place case grew out of a fire that destroyed a Waikiki nightclub and the insurer’s refusal to act on the claim. Bad faith claims arise from many kinds of coverage, including fire, storm, water, theft, and commercial property losses, as well as auto, disability, and other policies.
Breach of Contract vs. Insurance Bad Faith
| Breach of Contract | Bad Faith (Tort) |
The core question | Did the insurer fail to pay what the policy requires? | Did the insurer handle the claim unreasonably or unfairly? |
Typical example | Insurer wrongly says the loss is excluded and refuses to pay. | Insurer ignores evidence, delays for months, or denies without a real investigation. |
What you can recover | Policy benefits owed and related contract damages. | Policy benefits, plus consequential losses and, in some cases, emotional distress and punitive damages. |
Proof needed | The policy covers the loss and the insurer did not pay. | The insurer’s conduct was unreasonable, and in some cases that it knew or recklessly disregarded that it was. |
Can both be filed? | Yes, often in the same lawsuit. | Yes, often in the same lawsuit. |
Examples of Insurance Bad Faith
What the Insurer Does | Why It May Matter | What To Keep |
Delays without a real reason | Unreasonable delay can be evidence of bad faith, especially while you face mounting costs. | Dates of every call, email, and request for updates. |
Denies without investigating | Hawaii law prohibits refusing to pay without a reasonable investigation. | The denial letter and any inspection or adjuster reports. |
Misstates the policy | Misrepresenting policy provisions is a listed unfair claim practice. | Your full policy and the insurer’s written statements. |
Lowballs far below real costs | An estimate far below actual repair costs may show unreasonable valuation. | Contractor bids, expert estimates, and photos. |
Demands endless paperwork | Repeated requests can be used to stall or wear you down. | A log of each document request and what you sent. |
Pressures a quick, cheap settlement | Pushing a release before the full loss is known can be unfair. | Emails, letters, and notes of calls. |
Ignores evidence in your favor | A one-sided investigation can suggest the result was predetermined. | Your submitted evidence and the insurer’s response, or lack of one. |
Fails to pay the undisputed part | Withholding amounts it does not dispute can be unfair claim handling. | Payment records and the insurer’s explanation. |
Honest Mistake or Bad Faith? Why the Difference Matters
Insurers are allowed to disagree with you, and a reasonable dispute over coverage is not automatically bad faith. The difference usually lies in how the insurer behaved.
| Reasonable Dispute or Mistake | Possible Bad Faith |
Investigation | Thorough, timely, and documented. | Superficial, delayed, or skipped. |
Explanation | Clear reasons tied to policy language. | Vague, shifting, or unsupported reasons. |
Communication | Responsive and transparent. | Ignored calls, missed deadlines, evasive answers. |
Valuation | Supported by reasonable evidence. | Far below real costs with no good basis. |
Treatment of you | Professional and fair. | Pressure, confusion tactics, or intimidation. |
An honest early assessment protects you. If your case is a coverage dispute rather than bad faith, we will say so and pursue the contract claim.
Hawaii Law Behind Bad Faith Claims
Common-law bad faith: Best Place, Inc. v. Penn America Insurance Co., 82 Haw. 120 (1996), recognized the tort of bad faith in first-party insurance claims.
Unfair claim practices statute: Hawaii Revised Statutes §431:13-103(a)(11) prohibits unfair claim settlement practices, such as misrepresenting policy provisions, failing to acknowledge claim communications promptly, refusing to pay without a reasonable investigation, and failing to make a good-faith effort to settle claims where liability is reasonably clear. A violation does not itself create a private lawsuit, but it can be used as evidence of bad faith.
Deadlines: Under HRS §657-7, claims for damage to property generally must be filed within two years. Your policy may set shorter notice or suit-limitation deadlines. Because deadlines can depend on the type of claim, speak with an attorney early.
State regulator: The Hawaii Insurance Division of the Department of Commerce and Consumer Affairs (DCCA) investigates insurer compliance and can be reached at 1-844-808-DCCA (3222). A regulatory complaint does not replace your right to bring a legal claim.
Court: Bad faith claims with significant damages are typically filed in Hawaii Third Circuit Court in Hilo at 777 Kilauea Avenue, where jury trials are available. See our civil litigation service for the District Court versus Circuit Court comparison.
Where Bad Faith Claims Arise on the Big Island
- Fire losses, including total losses and smoke damage. See our fire insurance claim lawyer and fire damage insurance claim attorney
- Storm, wind, and water damage that insurers blame on age or maintenance. See our property insurance dispute attorney
- Wrongful denials of homeowners claims. See our homeowners insurance claim denial lawyer
- Lava zone and volcanic coverage disputes
- Commercial property and business interruption claims with large financial stakes
- Delays and lowballs after major events when insurers face heavy claim volume
For business owners, our business law experience helps us measure lost income and understand the full impact on your company.
What To Do If You Suspect Bad Faith
- Keep a claim log: of every call, email, letter, and adjuster visit with dates.
- Save everything in writing: and follow up phone calls with an email summary.
- Request the denial reasons in writing: and a copy of your policy and claim file.
- Document your costs: that result from the delay, such as hotel stays and extra repairs.
- Do not sign a release: or accept a final payment without understanding the effect.
- Do not miss deadlines: in your policy or under HRS §657-7.
- Speak with an attorney: before sending angry letters or giving recorded statements.
Why Choose Ohana Law Firm as Your Bad Faith Insurance Lawyer
William Dean, Esq. is an HSBA-licensed Hawaii attorney who has litigated in Hawaii Third Circuit Court against insurance companies and opposing law firms.
- Financial and business depth. A JD from the William S. Richardson School of Law, an LLM in International Law from George Washington University, and an MS in Finance from Boston College help with calculating complex financial damages.
- Proven in high-stakes disputes. Ohana Law Firm secured a $5 million arbitration award for a client in a contested commercial matter. Every case is unique, and past results do not guarantee future outcomes.
- Always reachable. Your call goes straight to an attorney, 24/7, with no answering service in between.
- Free consultation to review how your insurer handled your claim.
- Transparent pricing so you know what to expect before you commit.
- Local roots. Based in Hilo, serving clients from Kona to Ka’u. See what clients say about us or meet the team.
Serving All of Hawaii Island
We represent policyholders across Hawaii County from our Hilo office, including Hilo, Kailua-Kona, Puna, Kohala, Ka’u, and Hamakua. Wherever you live, we treat you like family.
Office: 106 Kamehameha Ave, Suite B, Hilo, HI 96720
Phone: 808-289-5199 | Email: william@ohanalawfirm.com
Frequently Asked Questions
Bad faith occurs when an insurer breaches its duty of good faith and fair dealing in handling a claim, for example by delaying without cause, refusing to investigate, or denying a claim it knows is valid. Hawaii recognizes this as a tort in first-party insurance claims.
Yes, if the facts support it. A bad faith claim is separate from, and can be brought together with, a claim for breach of the insurance contract. An attorney can review your claim file and the insurer's conduct.
Evidence usually includes the claim timeline, correspondence, adjuster and expert reports, the policy, and how the insurer's actions compare to Hawaii standards. Detailed records from the start of your claim help a great deal.
No. An insurer can reasonably disagree about coverage. Bad faith turns on whether the insurer's conduct was unreasonable, such as failing to investigate, or ignoring evidence.
Fees depend on the case. Ohana Law Firm offers a free consultation and transparent pricing so you know what to expect.
Yes. We serve all of Hawaii Island, including Kona, Puna, Kohala, Ka'u, and Hamakua.