Can someone else take over the right to sue an insurance company for bad faith? Yes. An assignment of bad faith rights is an agreement where the person or business insured under a policy transfers their right to bring a bad faith claim against the insurer to someone else, usually the injured person who sued them. This often happens after the insurer refuses a fair settlement, leaves its policyholder exposed, and a judgment or settlement goes beyond the policy limits. In exchange, the injured person may give the insured a covenant not to execute or another settlement protection.

Why it matters is simple: if the insurer's handling of the claim put the policyholder in a hole, the injured person may step into the policyholder's shoes and pursue the insurer directly. That can open the door to recovering more than the original liability limits, depending on the facts and state law.

For an injury claim, get every part of the deal in writing. The assignment should clearly say what rights are being transferred, whether there is an excess judgment, and whether the injured person agrees not to collect personally from the insured. In West Virginia, this issue can come up in third-party insurance cases shaped by Shamblin v. Nationwide Mutual Insurance Co. (1990), which addresses an insurer's duty to act reasonably in settlement negotiations. That can matter after a serious crash on a rural road or a heavy-truck wreck near unfinished stretches of Corridor H.