If you are hurt in a car accident and were sued by another driver, your auto insurance company has a responsibility to defend you. If the company does not defend you, it is referred to as a failure to defend. This is also the case if someone is injured at your house and sues you for damages.

Some fire insurance companies refuse to pay valid claims. They often search for reasons to deny your claim. For example, the insurance company may accuse a policyholder of insurance fraud or arson. Health insurance companies also try to maximize profits by reducing payment of benefits to policy holders. They may act in bad faith or unreasonably deny, reduce or delay payment of valid claims. Homeowners claims are also often denied because of policy exclusions or valuation disputes. In addition, life insurance companies often delay or deny life insurance claims.