Why the first number is rarely the real number
Insurance adjusters routinely open negotiations with a conservative figure, expecting a counteroffer. Accepting that first offer typically closes the claim permanently — there's generally no going back to ask for more later, even if additional injuries or costs surface afterward.
A genuinely early mover in this area of law
Arizona was one of the first states in the country to recognize the tort of first-party insurance bad faith, in Noble v. National American Life Insurance Co., 128 Ariz. 188 (1981). The Arizona Supreme Court held that every insurance policy carries an implied duty of good faith, and that violating it is a tort — not just a contract dispute. The court extended this further in Rawlings v. Apodaca, 151 Ariz. 149 (1986), confirming that a policyholder can pursue a bad faith claim without first having to win the underlying breach of contract claim.
A real, defined legal test
Under Arizona law, an insurer commits bad faith when it intentionally denies, fails to process, or fails to pay a claim without a reasonable basis for doing so. Importantly, an insurer isn't automatically liable just because it got the call wrong — Arizona applies a "fairly debatable" standard, meaning a position the insurer could reasonably hold, even if ultimately incorrect, generally doesn't amount to bad faith on its own. Arizona also backs this with a specific statute, A.R.S. § 20-461, which lists concrete prohibited practices — including compelling a claimant to litigate for a clearly owed amount by offering substantially less.
What this means practically
The real takeaway isn't that every low offer is legally actionable — it's that Arizona's legal framework gives genuine weight to a documented, well-supported counteroffer, and has for decades. Comparing the insurer's number against your own complete tally of economic and non-economic damages, rather than accepting the first figure at face value, is the practical step this history actually supports.