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 genuine, independent bad faith tort
Hawaii takes a notably protective stance here. In The Best Place, Inc. v. Penn America Insurance Co., 82 Haw. 120 (1996), the Hawaii Supreme Court held that every insurance contract carries an implied covenant of good faith and fair dealing, and recognized an independent tort cause of action for its breach — not merely a contract remedy, but a genuine tort with its own tort-style damages.
It reaches both first-party and third-party disputes
This is a real point of distinction compared to several other states: Hawaii's bad faith tort applies whether the dispute is first-party — your own insurer mishandling your UM/UIM or property claim — or third-party, where a liability insurer's handling of claims against its own policyholder is at issue.
A statute that backs up the common law
Hawaii's unfair claims settlement practices statute, HRS § 431:13-103(a)(11), enumerates specific prohibited insurer conduct — refusing to investigate reasonably, failing to attempt prompt and fair settlement once liability is reasonably clear, and similar practices. Violations of this statute can be used as evidence to support a bad faith claim under Hawaii case law.
What this means practically
This legal backdrop doesn't mean every low offer is bad faith — mere disagreement over value isn't enough. But it does mean Hawaii gives real teeth to a pattern of unreasonable claims handling. Comparing the insurer's offer against your own well-documented tally of damages, and keeping a record of how the claim was handled along the way, is the practical step this framework rewards.