Insurance companies are required to treat people who hold policies fairly and act in good faith. This is known as the implied covenant of good faith and fair dealing. Even if this isn’t explicitly spelled out in the contract or policy, it is implied that each side will act in good faith. If an insurance company disputes or denies a claim unreasonably, then it may be acting in bad faith. This is a breach of the covenant of good faith and fair dealing.
For example, consider a situation where a person is involved in a car accident. The accident wasn’t their fault, but the other driver drove off and cannot be found. This person can then file a claim under their own insurance policy for uninsured motorist coverage. Essentially, this is when your own insurance company will pay you if another driver is uninsured and causes an accident. It is often used in hit and run cases. If this person’s insurance company denies the claim without a reasonable basis — perhaps they did not investigate the claim and denied it automatically — then that could be grounds for a lawsuit against the insurance company for acting in bad faith. The person would then be able to recover damages from their insurance company for acting in bad faith. Damages in insurance bad faith cases can include both compensatory (the damages for what the person lost) and punitive (damages intended to punish the wrongdoer and discourage others from acting similarly).
Is Your Insurer Acting In Bad Faith?
Individuals sign up for insurance coverage to protect themselves and their families against unforeseen tragedy. A good policy can help offset costs stemming from an illness or an injury, or losses incurred if an individual’s home has been damaged or robbed.
Too often, however, residents of California find they need protection from the insurance companies themselves. When an individual falls victim to an accident or injury, it has become commonplace for insurers to act in bad faith. They mislead their clients. They delay settling a claim. They pay less than a policy mandate, and in some cases fail to make any payment at all. They deny property damage claims even when liability is clear. As a result, individuals find themselves more vulnerable than if they had never taken a policy in the first place.
Aggressive Protection from Insurance Companies
The California Insurance Code defines the following as deceptive and unfair acts, which may qualify as actionable bad faith:
Failing to settle in a fair and timely manner claims in which liability is clear
Misrepresenting key facts and provisions that relate to an individual’s policy
Failing to acknowledge a claim in a timely manner
Attempting to settle a claim for an amount less than that set out in the policy
Misleading an individual about the applicable statute of limitations for a claim
Altering someone’s application for coverage without that person’s knowledge
Advising claimants against hiring a lawyer
Insurance companies are supposed to protect you. The attorneys at Law Office of Warren Nguyen will help you hold them accountable when they act in bad faith.
Take Action Today
To learn how we can help, call us at (408) 603-9751or contact us online. We work on a contingency basis and have offices in San Jose and Bay Area.
Has your insurance company delayed or denied payment of a legitimate claim?
Has it changed the terms of your policy or canceled it without giving you proper notice? Has your policy been rescinded based on alleged misrepresentations made on the application? These are only some of the ways insurance companies take advantage of their policyholders.
We handle bad-faith and related claims arising from virtually every kind of insurance: health and disability, long-term care, life, auto, homeowner’s, commercial property, business interruption, and others.
If your insurance company does not act reasonably in disputing or denying your claim, it may be grounds for a lawsuit.
When you buy insurance — whether it’s car insurance, health insurance, homeowner’s insurance, or renter’s insurance — you expect that you will be treated fairly. After all, you are paying for both peace of mind and protection in the event that something awful happens, like a car accident, fire, or another event.
However, many insurance companies place profits ahead of people, causing them to unfairly dispute claims in order to avoid losing as much money. This can lead to a lot of turmoil for policyholders, who may even choose to give up on their claim rather than continue to fight for what they are entitled to under their policy.
Of course, in an ideal world, insurance companies would simply pay the claims that they are legally obligated to pay. Unfortunately, this does not always happen. In those situations, an experienced personal injury attorney may be able to pursue a case for insurance bad faith. If there wasn't a reasonable basis for an insurer to deny or dispute a claim, a plaintiff may succeed in this type of lawsuit or claim.