The damages recoverable by an insured for the insurer's breach of the insurance contract cannot exceed the dollar limits set forth in the insurance contract.

Question

Quizplus · Accepted Answer

The breaching insurer's liability may exceed the dollar limits set forth in the policy contract despite the insurer's good faith (though incorrect)basis for denying the claim,because a good faith but erroneous refusal to pay is nonetheless a breach of contract.

The Damages Recoverable by an Insured for the Insurer's Breach