When an insurance company enters into a contract of insurance with its insured person, that insurance company undertakes two obligations. The first is a duty to defend, and the second is a duty to indemnify. Our California personal injury lawyer at Maison Law expects insurance companies to fully discharge these duties.
What is the Duty to Defend?
A liability insurance company’s duty to defend arises when a third party brings a claim against the insured person. Just about every liability insurer has its own claims adjusters. As such, the claim against you is typically goes to one of those adjusters who will try to resolve it while recognizing the best interests of the insurer. They usually file a lawsuit in court if the claimant and the insurer are unable to resolve the claim. The insurance company still has a duty to defend its insured person in that lawsuit. Insurers tend to maintain their own litigation divisions with in-house salaried lawyers defending claims. Some law firms still continue to use outside counsel to represent their insured people in similar claims. They make different compensation arrangements.
The Duty to Indemnify
This refers to the duty of the insurer to pay any settlement that might be entered into on behalf of its insured person or any judgment up to his or her policy limits that might be rendered as a result of an accident. If a defense is 100% successful, or if they submit a not guilty verdict, there is no settlement or judgment award.
What is a Bad Faith Claim?
Bad faith claims might arise in the context of first-party or third-party claims. They’re different than denied claims. In a first-party context, bad faith might be found in an insurer’s refusal to pay a valid claim with no reasonable basis for the refusal or no timely or any investigation of the claim. In a third-party bad faith claim, the coverage limit of the policy might be exhausted by defense costs. For example, private investigators or independent medical examiners. Regardless of that fact, the insurer still might have the duty to indemnify its insured person for a covered loss. Courts generally see the duty in a first-party claim as stronger than the duty in a third-party claim.
Insurance companies want to avoid bad faith lawsuits. They’re time-consuming, expensive to defend and can result in high verdicts against insurers. If you believe that one or more acts of bad faith by your insurer have prevented you on moving ahead on a claim, speak with our California insurance lawyer here at Maison Law as soon as you can. We don’t want cost to get in the way of justice, so we offer free consultations and case reviews on bad faith claims.
We often take these types of cases on a contingency fee basis with no up-front retainer. By doing that, we’re able to help insured people who have dutifully paid their premiums. But they must not have received from their insurance company when they needed it the most. If you’ve paid all of your premium payments on a timely basis, but you feel that you’re not getting the help that you need from your insurance company, contact us for that consultation and case review.
Contact a California Personal Injury Lawyer Today
If you or a relative sustain injury in an accident, you might wonder if you’ll have to cover the cost of recovery alone. Make sure you have an attorney from Maison Law watching over every document exchange and communication you have with them.
After an accident involving a serious injury or the tragic loss of life in California, contact attorney Martin Gasparian for a free, no-obligation case consultation for your family. Mr. Gasparian takes a hands-on approach to every case and only gives victims advice that’s in their best interest.
