The History of Bad Faith Claims in Missouri
When insurance litigation issues first started to appear before courts, the focus was on coverage interpretations and technical policy defenses. Anthony G. Fussner, Overview of Bad Faith Litigation in Missouri, 62 Mo. L. Rev. 806, 808 (1997), http://scholarship.law.missouri.edu/mlr/vol62/iss4/3. Insurance policies were considered contracts and damages that were awarded were generally those available for breach of contract. Id. However, eventually courts started also allowing insured plaintiffs to bring various types of bad faith claims against their insurance companies. Id. These bad faith claims allowed for damage awards above and beyond the insurance policy limits. Id. Bad Faith claims were also considered by the courts to be actions in tort, not in contract. Id. at 823. This is an area of law that has continued to expand in Missouri under more recent rulings by the Missouri Supreme Court.
Bad faith liability claims generally fall into two general categories – either first party claims or third party claims. Fussner, supra at 809. First party insurance reimburses the insured for losses covered by the contractual terms of the actual insurance policy. Id. In a first party claim, the insured would bring a breach of contract action or an actionable tort against his insurer for failure to reimburse the insured on a claim covered by a policy. Id. at 809. 1