Entering into a lawsuit is stressful enough. But when some insurance companies use bad faith tactics to prioritize profits over people, the difficulties of a lawsuit are only further compounded, leaving accident victims wondering where they should turn for help.
At Maison Law, we aim to protect policyholders and will help fight bad faith insurance claims. The first step is to understand what bad faith insurance is and how you can protect yourself from it.
What is Bad Faith Insurance?
Bad faith insurance refers to an intentionally dishonest or unfair act by the insurance company. This means they failed to meet their legal or contractual obligations, and did not act with the best interest of the policy holder or person filing the claim.
Insurance companies are not required to approve every claim they receive. However, it is their duty to review the merits of each claim and make responsible decisions to handle and process it according to California Law. So, when an insurance company chooses not to settle a claim, even when they could if they acted responsibly, it is considered bad faith. In these scenarios, it is recommended to speak with a Bad Faith Attorney about pursuing a bad faith claim against the insurer.
Examples of Bad Faith Insurance
Knowing when you are experiencing bad faith from your insurer can be challenging. The majority of bad faith instances occur when an insurance company denies a claim without trying to settle fairly and promptly. Elements of your case that may indicate bad faith include:
- Misrepresenting facts
- Wrongfully delaying payment of a claim
- Failing to notify policyholder that additional information is needed to process a claim
- Failing to communicate crucial information needed to process a claim
- Failing to investigate in a timely manner
- Refusing to pay on a claim even when coverage is included in the policy
- Denying a claim without proper investigation
- Denying a claim without documented reasoning
If you believe your insurance denial is due to bad faith practices, then do not hesitate to contact a reputable Bad Faith Lawyer to get help.
Proving Bad Faith in California
To prove that your insurer acted in bad faith is not always straightforward. In order to prove bad faith, you must be able to present the following evidence:
- The Existence of a Valid Insurance Contract: there must be a valid contract between you and the insurer. The contract will outline the terms and conditions you and the insurer have agreed to. So, it is important to understand the terms of the contract and to be able to highlight where a violation occurred.
- Unreasonable Denial of Delay of a Claim: you’ll need to show the insurer denied your claim or delayed processing it without a good reason. This could occur if they ignore evidence that supports your claim, misrepresenting policy language, or applying undue scrutiny to avoid payment.
- Failure to Conduct a Proper Investigation. Insurance companies must perform a thorough investigation of each claim. If the insurer fails to investigate properly or disregards key evidence, then that would be considered bad faith. Evidence of this would be shown through claim denials without providing records of their decision or an investigation.
- Breach of Duty of Good Faith and Fait Dealing: Insurance companies are required by California Law to act in good faith and deal fairly with policyholders. If the insurance company breaches this duty by acting dishonestly, then you can document their inaccurate statement and hold them accountable for bad faith practices.
Damages You Can Recover from a Bad Faith Lawsuit
In bad faith cases, you can recover three types of damages. These damages include contract damages, extracontractual damages, and punitive damages. Contract damages are damages representing the amount of the claim that was denied plus interest. For instance, if you have a health insurance claim for $50k that was denied, the contract claim is that amount plus 10% each year.
Extra-contractual damages are damages to compensate you for any economic, emotional distress, and attorney fees. These damages are to help you recover any type of financial and emotional loss you sustained as a result of the insurer’s bad faith. For example, if you had to borrow money to pay for additional medical care, you can recover interest on that loan. Or if the insurer’s actions forced you into bankruptcy, you can recover the damage to your credit.
Punitive damages are for malicious, fraudulent, or oppressive behavior, according to California Civil Code Section 3294. These are exemplary damages, served to bad faith insurers to set an example to others as the type of conduct that is not tolerated in the state of California. These damages are rare, but can be applied to a bad faith lawsuit if the insurer deliberately concealed relevant information or consciously violated the rights and safety of the insured.
Get Legal Help with Your Bad Faith Claim
If you or a loved one believes their insurance company, or the insurance company of a defendant, is being dishonest or unfair, Maison Law can help. Our team of Personal Injury Lawyers are highly experienced when it comes to dealing with insurance companies and protecting the rights of injured victims. Contact Maison Law today for a no-cost, no-obligation consultation to get the legal help you need.
