Your insurance policy is a contract between you and your insurance provider. In exchange for your premiums, the insurer has accepted a legal duty to provide you with coverage.
But because insurance is also a business, it is not uncommon for an insurance company to attempt to increase their profits by denying claims and paying out as little as possible.
If you are being treated unfairly by your insurer, you should know that you have the right to hold them accountable under California’s Bad Faith Laws.
California’s Bad Faith Laws
When you file a legitimate insurance claim, your insurance provider has a legal obligation to act in good faith in responding to your insurance claim.
California’s Bad Faith Laws forbid insurance companies from acting in bad faith when settling insurance claims and requires them to process legitimate claims in a reasonable fashion.
An insurance provider is acting in bad faith whenever it:
- Does not pay claims in a timely fashion,
- Denies legitimate claims for questionable reasons,
- Underpays for a covered claim.
- What Can You Do If An Insurance Company is Treating You Unfairly?
California allows you to sue an insurance company to be compensated for any unnecessary stress and inconvenience you experienced because your claim was handled in an unreasonable manner.
You may also be reimbursed for any attorney’s fees incurred in bringing the lawsuit to court and, in some cases, be awarded punitive damages.
California courts do not approve of insurance companies who act in bad faith when settling legitimate claims. And often penalize them with judgments that are many times larger than the original claim.
You may have grounds to seek compensation whenever your insurance provider:
- Does not pay on your claim even though your policy requires them to do so;
- Denies your claim with no legitimate reason;
- Unreasonable delays paying your claim with no legitimate reason;
- Refuses to pay your claim for reasons that are against the law;
- Fails to fully investigate and evaluate your insurance claim;
- Fails to act in good faith when negotiating a fair settlement of your claim.
Other examples of conduct that would constitute bad faith include:
- Accusing you of being at fault for an accident with no basis for making such an accusation;
- Taking unreasonable amounts of time to pay your claim;
- Offering unreasonably low amounts to settle your claim;
- Denying coverage for events that are clearly and unquestionably covered under your policy;
- Failing to respond to your attempts to communicate with them.
The amount of compensation you stand to receive because for an insurer's bad faith will depend on the unique circumstances of your case. But, only an attorney experienced in insurance bad faith lawsuits will have an idea of how much you might expect to be compensated.
So, if you feel that your insurance claim is not receiving fair treatment, contact a qualified personal injury attorney who can help you seek the compensation you deserve.
- Reminder: Don't forget to pay your first month's premium for health insurance (healthcare.gov)
- Your Employer's Health Insurance Responsibility (bernews.com)
- How Information Technology Can Help Insurance Companies (asgct.com)