Insurance companies owe a duty of good faith in dealing with the persons they insure. If they violate that obligation while they are handling your claim, California allows the insured person (or “policyholder”) to sue the insurance company. We represent all clientele with the wrongful denial of insurance coverage or insurance benefits by insurance companies.
What is Bad Faith?
An insurance company has many duties to its policyholders. One, it usually has a duty to defend a claim (or lawsuit) even if some or most of the lawsuit is not covered by the insurance policy. Two, it has a duty of indemnification, which is the duty to pay a judgment against the policyholder, up to the limit of coverage, but only if the judgment is for a covered act or omission. As a result, most insurance companies exercise a great deal of control over litigation. Three, it has the duty to provide benefits where coverage exists under the policy. These are only a few examples of the duties owed to policyholders.
Bad faith is a fluid concept and is defined primarily in case law. Examples of bad faith include undue delay in handling claims, inadequate investigation, refusal to defend a lawsuit, threats against an insured, refusing to make a reasonable settlement offer, or making unreasonable interpretations of an insurance policy. The policyholder must be damaged. For example, a policyholder may suffer damages if an insurance company refuses to make a reasonable settlement offer to which the policyholder would agree, and he or she is afterwards subject to a judgment in excess of the policy limits .
In some cases, punitive damages are recoverable against insurance companies as a mechanism to prevent future behavior.
Types of Insurance Claims
- Bad Faith Insurance Claims
- Denial of Disability Insurance Benefits
- Failure to settle uninsured motorist automobile claims in a fair and reasonable manner
- Denial of Property Coverage Claims
- First Party Claims
- Other insurance claims
- ERISA claims
Questions for Your Insurance Company
- What if an insurance company doesn’t honor the policy and pay a legitimate claim?
- What is insurance company good faith?
- If the insurance company won’t settle within policy limits and ultimately the case goes to trial with the result of an award above policy limits, is this bad faith?
- I read the terms of my policy one way, my insurance company sees it completely different. Who determines which is right?
- I think the offer the insurance company gave me is really, really low. Is this bad faith?
- Can I appeal a claim denial?
A lawyer can help you communicate effectively with your insurance company and your doctors. At Makarem & Associates, our litigation lawyers have obtained judgments and settlements for a number of medical rulings. Contact us today by phone 310.312.0296 or email email@example.com to discuss your case .
In recent insurance litigation, A California court’s...