What Is Insurance Bad Faith In California?

Insurance bad faith is when your insurance company doesn’t treat you fairly. Bad faith refers to unreasonable or unfair conduct by an insurance company. An insurance company must give at least as much consideration to you as it does to its own interests.

In California, when an insurance company issues a policy of insurance, there is an implied covenant (i.e., promise) of good faith and fair dealing. That means the insurance company will not do anything that will injure your rights to receive the benefits of the policy.

In other words, every time an insurance company issues a policy to you, they promise to treat you fairly. Sometimes they don’t. For example, maybe the insurance company withholds or delays the benefits of the policy from you. A bad faith action generally arises when the insurance company unreasonably acts or fails to act in a manner that deprives you of the benefits of the policy.

Read this: What Is The Fair Claims Settlement Act In California?

See this too: What Is Insurance Bad Faith In California?

Bad faith claims can be complicated because they involve tort law in the context of contract law. Different damages are at issue and different standards are at play. You should find a San Diego Property Damage Lawyer who understands those distinctions. It’s important to find a San Diego Bad Faith Attorney who understands how insurance claims work. Read Evan’s blog on “How insurance claims work.”

And you’d better find a fighter, because once you allege bad faith against an insurance company, they hire teams of defense lawyers to fight those allegations vigorously. Don’t expect an easy win. But don’t give up either. Insurance companies still commit bad faith even after decades of bad faith litigation.

You may need to know about the California Made Whole Doctrine: What Is The Made Whole Doctrine?

What Constitutes Bad Faith In California?

Here are some recognized examples of insurance bad faith in California:

  1. The insurance company failed to investigate the claim with reasonable diligence;
  2. The insurance company rejected a settlement offer without having made an honest, intelligent, and knowledgable evaluation of the offer;
  3. The insurance company failed to seek competent legal advice;
  4. The insurance company delayed payments based on inadequate investigations; and
  5. The insurance company employs a standard of medical necessity significantly at variance with community medical standards to deny a claim.

There are lots of ways an insurance company can commit bad faith. Call Evan-he can help!

What Are The Elements Of An Insurance Bad Faith Claim In California?

It depends on the type of bad faith claim you have.

For example, if your claim is based on the insurance company’s failure to properly investigate your claim, then the elements are:

  1. You suffered a loss under an insurance policy issued by the insurance company;
  2. You properly presented a claim to the insurance company to be compensated;
  3. The insurance company failed to conduct a full, fair, prompt, and thorough investigation of all the bases of your claim;
  4. You were harmed; and
  5. The insurance company’s failure to conduct a full, fair, prompt, and thorough investigation of all the bases of your claim was a substantial factor in causing you harm.

If, however, your claim is based on the insurance company’s failure to accept a reasonable settlement demand within policy limits, then the elements are:

  1. You were insured under the insurance company’s insurance policy;
  2. Someone made a claim against you that was covered by the insurance policy;
  3. The insurance company failed to accept a reasonable settlement demand for an amount within policy limits;
  4. The insurance company’s failure to accept the demand was because of the insurance company’s unreasonable conduct; and
  5. A monetary judgment was entered against you for a sum greater than the policy limits.

What Are The Statute Of Limitations For An Insurance  Bad Faith Claim In California?

The statute of limitations is 2 yrs assuming the cause of action is actually bad faith, not breach of contract. See CCP § 339(1). Bad faith and breach of contact claims are commonly brought at the same time. The statute of limitations for a breach of contact, however, may be different.

Also, know that almost all insurance policies contain a time period by which a lawsuit can be brought against the insurance company (look for a provision that says “Suits Against Us,” or something similar). Those time periods are generally shorter than the statute of limitations, and usually trump the statute of limitations.

Free Consultation

Did you have a property damage claim and the insurance company was dragging its feet? Was your claim improperly handled? Was it wrongly denied?

Contact Evan, a lawyer experienced with insurance claims and who used to work for insurance companies. Evan teaches other lawyers about insurance.

Call Evan, a San Diego Property Damage and Bad Faith Lawyer who handles bad faith claims against insurance companies. He’s highly rated by former clients. Read more at Reviews.

If you think you have a bad faith claim against your insurance company, contact Evan, a San Diego Property and Bad Faith Damage Lawyer who handles bad faith claims.

Evan’s first years of law practice were spent defending Hurricane Katrina claims in New Orleans. He understands the tricks insurance companies use to deny your claim.

Call (858) 324-6606 for your free consultation.