Southern California Bad Faith Insurance Attorneys

If you believe that your insurance company has acted unreasonably in denying your claim for coverage, it is important to understand your rights and options. The lawyers and staff at the Law Offices of Charles S. LiMandri have many years of experience handling bad faith insurance matters and other insurance disputes.

The content below is provided to enhance your knowledge about general bad faith insurance matters. Contact our office to schedule a free initial consultation to discuss your specific situation..

Bad Faith Insurance - An Overview

Most states recognize an implied covenant of good faith, requiring insurance companies to use fair dealing when evaluating claims. When an insured's claim is wrongfully denied by their insurer, it is considered bad faith. An insurance policy is a contract between the insured and the insurance carrier. If good faith and fair dealing are not used in processing a claim, the insurer may be sued under a theory of bad faith. When successful in bringing a bad faith claim, an insured is entitled to all damages resulting from that claim and, possibly, additional damages not available for breach of contract alone. In cases of extreme misconduct, the insured may also be entitled to receive punitive, or exemplary, damages.

Examples of bad faith include failure to promptly or thoroughly investigate a claim, unreasonable denial of payment under a policy, and the refusal to settle a claim in a timely fashion. Disability, life, homeowner, automobile, and accidental death insurance policies all require good faith on the part of an insurer.

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Defining Bad Faith

Bad faith is the unreasonable denial of an insurance claim by an insurer. There is no national standard for bad faith, but most jurisdictions agree the following examples demonstrate unfair settlement practices. If you feel you have experienced a bad faith denial of a claim, particularly if the actions of the insurer appear to be intentional, consult an insurance lawyer to discuss your options.

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Denied Claims as a Result of Insurance Bad Faith

A bad faith denial of an insurance claim is a breach of the duty to exercise good faith and fair dealing between parties to an insurance contract. There are several ways in which an insurance company may deny a claim in bad faith. It may do so by failing to promptly or thoroughly investigate a claim, by denying a claim without justifiable basis, or by unreasonably interpreting a coverage provision.

If your insurance claim is denied as the result of inadequate investigation, make sure you keep notes of every conversation you have with the individual who reviewed the claim. Obtain the person's name, and write down the dates and times of all conversations. Request that a supervisor review the claim and subsequent denial.

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Types of Bad Faith Insurance Claims

Before any claim asserting bad faith can be filed there must be a denial of your insurance claim, an unreasonable delay in denying, or a failure to pay or provide coverage. An insured must show that their claim was denied, or unreasonably delayed, and the insurer had no justification for their decision or delay. Failure to investigate a claim may also give rise to a legal claim for insurance bad faith. An experienced insurance lawyer can assess your specific situation.

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Claim File Discovery in Bad Faith Insurance Cases

In a bad faith case, a plaintiff needs to produce evidence that an insurer has breached the covenant of good faith and fair dealing for a covered loss. Good faith and fair dealing are broad terms that generally mean an insurer should investigate your claim promptly and provide a timely report indicating whether a claim is covered and, for what amount. It is important to have access to the claim file, which contains relevant information developed during an insurer's investigation. The claims file is typically the working file of your claims adjuster.

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