We buy insurance to protect ourselves, our families, or our businesses against catastrophic events such as natural disasters, car crashes, injuries, and illness. All too often, when something happens and we turn to our insurance company to pay for these losses, the insurer denies the claim, agrees to pay only a portion of the true value of the claim, or delays payment.
Under California law, an insurance company must act in good faith when fulfilling its contractual obligations and may not unfairly interfere with a policyholder’s rights under the insurance contract. Such rights include receiving benefits for covered risks, proper investigation into the liability for an injury, defense by the insurer against claims by third parties, and using good faith to settle all claims. If an insurance company fails to meet its obligations under the contract, it may constitute a breach of the covenant of good faith and fair dealing and policyholders may bring a legal claim for insurance bad faith.
Some acts that may constitute bad faith include:
Unreasonable delays or unreasonable refusals to settle a claim
Refusal to pay a valid claim or unreasonably limiting or delaying payments
Failing to conduct a prompt, fair, and full investigation into a claim
Refusing to communicate with policyholders about claims or claim status
Failing to provide explanations for a claim denial
Misrepresenting the facts of coverage under the policy
Compromising a policyholder’s ability to defend a lawsuit
When you make an insurance claim or someone files a claim against your policy, you rightfully expect your insurance company to abide by the terms of your policy. When an insurance company wrongfully refuses to meet its obligations and provide coverage or defense, you have important legal rights to protect. If you believe your insurance company acted in bad faith, contact Lallande Law, PLC today by filling in the contact form or calling (800) 308-8800 for a free consultation.