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Oftentimes, purchasing an insurance policy gives you peace of mind and provides some protection should the worst-case scenario become a reality. This gives you a sense of safety should you get into a car accident or your home get damaged, and your policy will cover your losses. Unfortunately, this is not always the case. 

When insurance companies do not uphold the terms of their policy and breach their contract, it is known as bad faith. If this has happened to you, you may have an insurance bad faith claim. 

When you enter into an agreement with an insurance company and purchase a policy, your insurance company owes you a duty of good faith and fair dealing. This means that they must be honest and fair in their dealings with you as a policyholder, and failing to do so would constitute a bad faith claim. 

Some examples of behavior that would constitute bad faith in California include:

• Denying a valid claim
• Inadequate investigation of a claim
• Failure to investigate a claim
• Delaying payment longer than necessary
• Misrepresenting policy benefits or other related facts
• Unreasonably low settlement offers
• Canceling claims or policies
• And more

If an insurance company engages in any of the above-listed behaviors, it opens itself up to potential bad faith insurance claims. These claims can be filed against any type of insurance, including life, auto, health, homeowner’s, and other types. 

Damages Available For Bad Faith Insurance Claims

A successful bad faith insurance claim in California can lead to the insurance company being responsible for contract damages, extracontractual damages, and punitive damages. 

• Contract damages include the amount that was denied plus interest.
• Extracontractual damages include compensation for economic damages, emotional distress, and any applicable attorney fees.
• Punitive damages are typically reserved for the most egregious bad faith claims. These damages are intended to punish the at-fault party and must have clear and convincing evidence to back them up. Punitive damages are rare and significantly more difficult to prove than contractual or extracontractual damages. 

Examples of Actions That May Result In Bad Faith Insurance Claims 

• Your car insurance company denies your claim for damages from a car accident without conducting a proper investigation, disregarding the clear evidence you provided that supports your claim.
• Your homeowner’s insurance company unreasonably delays processing your claim due to damage caused by a burst pipe, which causes you significant inconvenience and financial strain.
• Your life insurance company provides you with misleading information about the terms of your policy, which causes you to believe you have coverage that, in actuality, you do not.
• Your disability insurance provider abruptly terminates your benefits without adequate evidence or justification, leaving you without essential income support. 

*it’s important to note that these are simply examples of insurance bad faith and the details of your claim will depend on the specifics of your policy. 

How Can You Protect Yourself?

• Keep thorough records of all interactions and decisions made with your insurance provider. If they do not provide written documentation, make immediate notes after any communication with them.

• In case of a claim denial, request written clarification for the reasoning behind the denial. Request a copy of your insurance policy for reference. 

• Ask questions to understand your policy and your terms of coverage. Understanding your policy is essential to advocating for your rights. 

• Contact a Singleton Schreiber attorney if you believe your insurance provider unjustly denied your claim so that we can help you determine your next steps. 

How Can An Attorney Help You?

Oftentimes, policyholders trust their insurance provider and their decisions, so they are unaware when their insurance policy provider is acting in bad faith. Unfortunately, it is not uncommon for insurance companies to act with their best interest at heart, ultimately harming their policyholders and inflicting financial strain, emotional distress, and other unnecessary challenges. 

Seeking assistance from an experienced attorney is crucial for bad-faith claimants in California. A skilled attorney can provide invaluable assistance throughout the legal process, from drafting a demand letter and initiating a complaint, to guiding you through depositions, mediation, and possibly even trial proceedings. 

At Singleton Schreiber, our team has the experience to handle a variety of bad-faith insurance claims. Don’t go it alone, contact us today to schedule a free consultation with one of our attorneys.