Bad Faith in Mandatory Motor Insurance Claims: Rethinking the Boundaries Between Contract and Tort in Ghanaian Insurance Law
DOI:
https://doi.org/10.37591/jbil.v9i2.2048Keywords:
Bad faith insurance; Mandatory motor insurance; Insurance claims denial; Ghanaian insurance law; Consumer protection; National Insurance Commission; Contract–tort boundary; Insurance regulation.Abstract
Mandatory third-party motor insurance in Ghana is designed to protect accident victims and promote public confidence in the insurance system. However, persistent practices of unjustified claim denial, delay, and technical repudiation by insurers reveal a structural weakness in the legal framework governing claims settlement. This article interrogates whether the prevailing treatment of insurance bad faith as a purely contractual breach provides adequate remedies or effective deterrence against insurer misconduct. Drawing on doctrinal analysis and comparative common-law jurisprudence, the article argues that the
contractual paradigm limited to expectation damages fails to capture the unique relational and public-interest character of mandatory motor insurance. It demonstrates that bad faith claim handling implicates interests beyond private bargain, particularly where third-party claimants are involuntarily brought within the insurance relationship. The article contends
that the rigid separation between contract and tort in Ghanaian insurance law is normatively unsustainable in this context. It proposes a reconceptualisation of insurer liability through either the judicial recognition of a tort of insurance bad faith or the adoption of a hybrid remedial framework incorporating tort-like sanctions. Such an approach, it is argued, would enhance accountability, deter opportunistic behaviour, and strengthen consumer confidence in Ghana’s compulsory motor insurance regime.
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