# Tenn. Code Ann. § 56-7-106: Liability of policyholders when action not brought in good faith

> Tennessee · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-106

## Section

- **Citation:** Tenn. Code Ann. § 56-7-106
- **Heading:** Liability of policyholders when action not brought in good faith
- **Jurisdiction:** Tennessee
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** TN Code / Title 56 / Chapter 7 / Section 56-7-106

## Text

In the event it is made to appear to the court or jury trying the cause that the action of the policyholder in bringing the suit was not in good faith, and recovery under the policy is not had, the policyholder shall be liable to the insurance company, corporation, firm, or person in a sum not exceeding twenty-five percent (25%) of the amount of the loss claimed under the policy; provided, that the liability, within the limits prescribed, shall, in the discretion of the court or jury trying the cause, be measured by the additional expense, loss, or injury inflicted upon the defendant by reason of the suit. Acts 1901, ch. 141, § 2; Shan., § 3369a142; Code 1932, § 6435; T.C.A. (orig. ed.), § 56-1106.
In the event it is made to appear to the court or jury trying the cause that the action of the policyholder in bringing the suit was not in good faith, and recovery under the policy is not had, the policyholder shall be liable to the insurance company, corporation, firm, or person in a sum not exceeding twenty-five percent (25%) of the amount of the loss claimed under the policy; provided, that the liability, within the limits prescribed, shall, in the discretion of the court or jury trying the cause, be measured by the additional expense, loss, or injury inflicted upon the defendant by reason of the suit.
Acts 1901, ch. 141, § 2; Shan., § 3369a142; Code 1932, § 6435; T.C.A. (orig. ed.), § 56-1106.

## Nearby sections

- [Tenn. Code Ann. § 56-7-101 Contract of insurance - Definition - Restrictions and limitations - Exceptions](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-101.md)
- [Tenn. Code Ann. § 56-7-102 Policies to contain entire contract - Exceptions - Construed as Tennessee contracts - Rules of construction - Duty to defend - Determination of obligations - Assignment](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-102.md)
- [Tenn. Code Ann. § 56-7-103 Misrepresentation or warranty will not void policy - Exceptions](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-103.md)
- [Tenn. Code Ann. § 56-7-104 Hostilities shall not invalidate policy](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-104.md)
- [Tenn. Code Ann. § 56-7-105 Additional liability upon insurers and bonding companies for bad-faith failure to pay promptly](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-105.md)
- [Tenn. Code Ann. § 56-7-106 Liability of policyholders when action not brought in good faith](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-106.md)
- [Tenn. Code Ann. § 56-7-107 Suit on certificate issued under group insurance policy - Copy of policy attached to defendant's answer](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-107.md)
- [Tenn. Code Ann. § 56-7-108 Mortality tables](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-108.md)
- [Tenn. Code Ann. § 56-7-109 Definitions - Timely reimbursement of health insurance claims](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-109.md)
- [Tenn. Code Ann. § 56-7-110 Part definitions - Correction of payment errors - Retroactive denial of reimbursements](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-110.md)
- [Tenn. Code Ann. § 56-7-111 Property or casualty insurance - General contractor as a payee](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-111.md)
- [Tenn. Code Ann. § 56-7-112 Deferred individual annuity contracts - Minimum guaranteed surrender value](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-112.md)
- [Tenn. Code Ann. § 56-7-113 Inquiry by homeowner's insurance policyholder not grounds for premium increase or cancellation of policy - Communications necessitating investigation - Violation constitutes unfair trade practice](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-113.md)
- [Tenn. Code Ann. § 56-7-114 Certificates of insurance](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-114.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C7_S56-7-106. Check the current official text before relying on it. Not legal advice.