If an insurer in bad faith denies coverage for a claim, the insured may sue, but can recover no more than the policy's coverage limits.

Question

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When an insurer denies a claim in bad faith, the insured may sue for damages that can exceed the policy's coverage limits, including compensatory damages for breach of contract, and potentially punitive damages and attorney's fees.

If an Insurer in Bad Faith Denies Coverage for a Claim