Which of the following is a common indicator of potential bad faith in a claim?

• A. Unreasonable delays in handling the claim
• B. Strong documentation and timely communication
• C. Thorough investigation
• D. Compliance with policy terms

Answer: (A)

Red flags in claim handling signal potential bad faith. Unreasonable delays in processing a claim can indicate obstruction or a deliberate attempt to pressure a payoff, which is a common sign of bad-faith handling. By contrast, strong documentation and timely communication, a thorough investigation, and compliance with policy terms are hallmarks of good-faith handling—they show the insurer is working transparently, gathering facts, and applying the policy correctly. So the presence of delays stands out as the typical indicator of bad faith in this context.