Legal Definitions - vexatious refusal to pay

Vexatious refusal to pay is when an insurance company unjustifiably refuses to pay an insurance claim, often based on suspicion rather than hard facts that the claim is invalid. This is also known as vexatious delay or simply refusal to pay.

For example, if someone files a claim with their insurance company for damages to their car after an accident, but the insurance company repeatedly denies the claim without providing any evidence that the claim is invalid, this could be considered vexatious refusal to pay.

Another example could be if a homeowner files a claim for water damage to their house, but the insurance company delays the claim for an unreasonable amount of time without providing any valid reason for the delay.

These examples illustrate how an insurance company can act in bad faith by refusing to pay a valid claim or delaying payment without justification. This can cause financial hardship and frustration for the policyholder, who may have to take legal action to receive the compensation they are entitled to.