New Hampshire

Guide for Causes of Action for Bad Faith Claims

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Last Updated
July 20, 2021

N.H. Rev. Stat. Ann. § 417:4, XV(a):

Under N.H. Rev. Stat. Ann. § 417:4,XV(a), “[a]ny of the following acts by an insurer, if committed without just cause and not merely inadvertently or accidentally, shall constitute unfair claim settlement practices: . . . (4) [n]ot attempting in good faith to effectuate prompt, fair and equitable settlements or compromises of claims in which liability has become reasonably clear; (5) [c]ompelling claimants to institute litigation to recover amounts due under insurance policies by offering substantially less than the amounts ultimately recovered in actions brought by them; . . . (14) [k]knowingly underestimating the value of any claim by an insurer or by an adjuster representing the insurer.”

Insurers have a duty to use reasonable care in the settlement of third-party liability actions.[1] New Hampshire had adopted a negligence standard to determine liability of an insurer failing to settle a third-party claim within policy limits.[2] The negligence standard is defined as how a reasonable man might act under the sand circumstances.[3] In applying the standard, it is recognized that “when one knows or has reason to anticipate that the person, property, or rights of another are so situated . .. that they may be injured through his conduct, it becomes his duty so to govern his action as not negligently to injure the person, property or right of that other.”[4] It follows from this standard that the insurer must recognize the conflict of interest inherent in the insurance contract and “perform the duty arising from the particular facts presented.”[5] The determination of negligence is made by “a slow motion rerun of [the insurer’s]actions leading up to the verdict.”[6]


[1] Dumas v. State Mut. Auto Ins. Co., 111 N.H. 43 (1971). [Dumas III]

[2] 46-47.

[3] Dumas v. Hartford Accident & Indem. Co., 94 N.H. 484, 487 (1947). [DumasII]

[4] 488.

[5] DumasIII, 111 N.H. at 48.

[6] Id.(Emphasis added).

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Chartwell Law represents the interests of insurers and employers, as such, we continue to continue to monitor the legal landscape. If you have any questions about issues associated with right of action for bad faith claims, our attorneys are available to help. Please contact your Chartwell Law attorney.