We develop a theory of insurance claim settlement whose structure embodies an insurer’s capacity decision and negotiation between the insurer and claimant in an asymmetrically informed environment. We offer a solution to an insurer’s choice of upfront claim settlement amount under a...

This Article represents the first empirical study of the effects of bad-faith laws on claims decisionmaking by insurance companies. One of the most notable and debated developments in the law of tort and insurance since the 1970s has been the recognition in many states of an extracontractual...