Like the 50 states, the US Virgin Islands allow policyholders to recover through several avenues, in the event that an insurance company refuses to pay a valid claim. In the same way, USVI also allows a policyholder to claim infidelity in addition to a breach of the contract claim.
The Virgin Islands Act prohibits anyone engaged in insurance business from engaging in unfair competition practices or unfair or misleading. documents or practices in the conduct of such activities, which include the adjustment of a claim for benefits. 1 Under USVI law, carriers are also not allowed to misrepresent facts or policies and must pay claims immediately, which usually involve payment within thirty days of receipt of proof of application. 2
In addition to the express contractual obligations set out in the insurance policy and the statutory law of the Virgin Islands, USVI caselaw also imposes a Community law obligation on the insurer to act in good faith towards the insured. 3
Although USVI does not have the abundance of improper history that the state has received over the years, there are several cases within USVI that have been hailed as precedents.
These cases are in particular Justin v. Guardian Insurance Company and Charleswell v Chase Manhattan Bank . [1
- The existence of an insurance contract between the parties and an infringement from the insurer;
- intentional refusal to pay the claim;
- that there is no reasonably legitimate or arguable reason for the refusal (debatable reason) either in law or in fact;
- the insurer's knowledge of the absence for such a debatable reason; or
- when the plaintiff argues that the intentional failure stems from the insurer's failure to establish the existence of a questionable basis, the plaintiff must prove the insurer's intentional failure to establish the existence of such a questionable reason. 4
In addition, policyholders' complainants must be sure to consider the concept of the "core of the action" doctrine, which has found its way into the USVI case.
The core of the doctrine of action is applied when the assertions are:  Arises only from an agreement between the parties;
So it is up to the plaintiff to not only claim bad faith using the factors established by both Justin and Charleswell but the plaintiff can also need – with specific evidence and factual allegations – separate their damages claims from their breach of contract claims if this doctrine is argued on behalf of the defense.
Bruno Court analyzed the essence of the doctrine of action in insurance disputes and found that a bad claim of faith will not be blocked by the doctrine of "the claim was based on an alleged breach of a social obligation introduced by tort law, and not a breach of a duty created by the underlying insurance contract. " 6
Most importantly, the difference can be argued this wa y: Corruption measures are for breaches of customs duties imposed by law as a matter of social policy, while contractual measures are only for breaches of duties imposed by mutual consensus agreements between individuals . 7
In order to correctly assert bad faith in the Virgin Islands, one must appeal and establish the Justin / Charleswell elements, while being aware of the core of the doctrine of action. In order to avoid the core of the action argument, the plaintiff must show how the bad faith stems from a general legal duty of good faith, which is introduced as a matter of social policy, rather than an obligation arising only from the contractual agreement.
1 See 22 VIC § 1201 (a).
2 See 22 V.I.C. § 1204); 22 V.I.C. § 228 (a).
3 See Charleswell v Chase Manhattan Bank, N.A. 308 F.Supp.2d 545, 572, 45 V.I. 495, 527 (D. VI. 2004); In re Tutu Water Wells Contamination Litigation 78 F.Supp.2d 436, 442, 42 V.I. 299, 308-309 (D. VI. 1999); Justin v. Guardian Ins. Co. 670 F.Supp. 614, 616, 23 V.I. 278, 281-282 (D. VI. 1987).
4 See Charleswell 308 F.Supp.2d at 573-574, 45 V.I. at 529; Justin 670 F.Supp. at 617, 23 V.I. at 282.
5 See Pollara v. Chateau St. Croix, LLC SX-06-CV-423, 2016 WL 2865874, at * 6 (VI Super. 3 May 2016
6 See Bruno v, Erie Ins. Co. 630 Pa. 79, 106 A.3d 48 (2014).
7 See Pollara at * 8.