Insurance Law · 25.06.2026

Bad Faith Insurance Claims: The Vietnamese Equivalent

Lawyer UnilawReading time: 5 min

“Bad faith” is a doctrine of United States insurance law. Vietnam does not have it, and does not need it — the Law on Insurance Business puts specific duties on the insurer and specific consequences for breaching them. If your claim in Vietnam has been refused, delayed or cut, the leverage is not a bad-faith tort with punitive damages. It is the evidence the insurer must be able to produce, and the deadlines it has already missed.

What the American doctrine does, and why it does not travel

In the United States, bad faith is a separate cause of action against the insurer for unreasonably denying or delaying a claim, and in many states it opens the door to damages beyond the policy limit. It is a creature of state law and of case law. Vietnam is a civil law system with no equivalent tort and no punitive damages, so a Vietnamese court will not entertain a claim framed that way. What it will do is apply the statute, article by article.

The exclusion clause: the insurer must prove it explained it

This is the single most useful provision in a refused-claim file. Article 19(2) of the Law on Insurance Business No. 08/2022/QH15 requires the insurer to set exclusions out clearly in the contract, to explain them clearly and fully, and to have evidence confirming that the policyholder was given that full explanation and understood it when the contract was made.

Read that as an evidential burden on the insurer, not on you. If the refusal rests on an exclusion and the insurer cannot produce that evidence, the exclusion is exposed. Ask for it in writing early, before positions harden.

Article 19(3) adds that where force majeure or an objective obstacle caused the policyholder to notify the event late, the insurer may not apply a late-notification exclusion at all.

Non-disclosure: only a deliberate misstatement lets the insurer rescind

Insurers often answer a claim by attacking the proposal form. Article 22(2) allows the insurer to rescind the contract only where the policyholder deliberately supplied incomplete or false information, and did so in order to obtain payment. Carelessness, an incomplete form, an honest mistake — none of those meet the test.

Article 22(3) runs the other way, and is rarely used. Where the insurer deliberately failed to provide information, or supplied false information, in order to get the contract signed, the policyholder may rescind, recover the premium paid, and claim damages.

Late notice: the insurer loses the reduction if the policy is silent

Article 46(1) lets the insurer reduce the indemnity in proportion to the loss it suffers because the policyholder failed to notify, or notified late, except in force majeure or an objective obstacle.

Article 46(2) takes that right away where the policy contains no agreement on the policyholder’s notification duty and the sanction for breaching it. Many policies on the market do not. Check the wording before accepting a deduction.

Delay has a price, and it is set by statute

Article 31(1) requires the insurer to pay within the period agreed in the policy, and where there is no agreed period, within 15 days of receiving a complete and valid claim file. Article 31(2) provides that an insurer paying late must pay interest on the amount for the period of delay, at the rate determined under the Civil Code.

Two things follow. Document the date the file became complete, because that is when the clock starts. And treat interest as an entitlement rather than a negotiating concession.

Disagreement on cause and amount: the independent surveyor decides

Article 53(1) places the cost of the loss survey on the insurer. Article 53(2) allows the parties to appoint an independent surveyor where they disagree on the cause and the extent of the loss; if they cannot agree on one, either party may ask the competent court or the arbitral tribunal to appoint one, and that surveyor’s conclusion is binding on both parties.

This is the practical substitute for a bad-faith claim. Where an American policyholder would allege unreasonable claims handling, a Vietnamese policyholder takes the cause of loss out of the insurer’s hands and puts it with a surveyor whose finding binds them both.

Two clocks you can miss

One year to file the claim with the insurer, from the date of the insured event — Article 30(1). Time lost to force majeure or an objective obstacle does not count. Where a third party is claiming against you, the year runs from the date of that demand — Article 30(3).
Two years to sue on a marine insurance contract, from the date the dispute arose — Article 336 of the Maritime Code, consolidated text No. 52/VBHN-VPQH. Cargo claims against the carrier are shorter still: one year from delivery, under Article 169. An insurer still “considering” a cargo claim can run you past that deadline against the carrier.

How the dispute is actually resolved

Article 32 sets the route: negotiation first, then mediation, arbitration or the courts according to the policy and the law. So the wording of the dispute clause matters, and it is worth reading before the claim rather than after the refusal.

What a refused claim file should contain

The policy and the certificate, with the exclusion actually relied on identified in writing.
The insurer’s evidence under Article 19(2) that the exclusion was explained and understood.
The date the claim file became complete, for the Article 31 clock.
The surveyor’s report, and a note of whether Article 53(2) has been triggered.
Any correspondence in which the insurer relies on the proposal form, tested against the deliberate-intent standard in Article 22(2).

Legal basis cited above: Law on Insurance Business No. 08/2022/QH15, Articles 19, 22, 30, 31, 32, 46 and 53; Maritime Code, consolidated text No. 52/VBHN-VPQH, Articles 169 and 336.

Insurers have their own lawyers from day one; the insured usually does not — see Unilaw’s insurance practice, or call +84 912266811 for a first assessment and a fee quote before any work starts.

For the wider picture, see how an insurance law lawyer in Vietnam handles a policy file, and why many a refused insurance claim is reversed on appeal.