Bad Faith Insurance

Insurance companies hold a lot of power when it comes to reviewing claims. In evaluating and settling claims, the insurance providers and their employees are required by law to demonstrate good faith toward policyholders and claimants. “Good faith” typically means an honest and fair assessment of the claims brought to them. Insurance companies are held to a code of conduct and are therefore legally obligated to not engage in unfair or fraudulent practices.

Should an insurance company engage in bad faith, a policyholder may have cause to file a lawsuit against the insurance provider. However, it is important to remember that insurance companies have substantial financial reserves and teams of attorneys at their disposal to counter these claims. This is where having your group of legal experts can be advantageous.

Examples of bad faith insurance claims include:

  • Refusing payment on a valid claim without justification
  • Providing compensation on a claim that is obviously substandard and without basis
  • Delaying payment on an approved insurance claim without justification
  • Ignoring telephone calls, letters, and emails about a valid claim
  • Use of intimidation or abusive tactics to try and get a policyholder to drop their claim
  • Not conducting a thorough investigation into a valid claim
  • Using deceptive or ambiguous language to confuse policyholders

Keep these tactics in mind when dealing with insurance companies. Understand that the insurance companies may use these tactics as a way to stall payments on valid claims. Be sure to take detailed notes.

If the insurance company denies your claim, you still have options. A denial is not the final say and you do have recourse. First, you can request a higher level manager from the insurance company to review the claim and ask for detailed reasons for the denial. Second, you can make an inquiry to your state insurance board. Third, you can also seek legal advice. If you suspect that the insurance company acted in bad faith in processing or denying your claim, we encourage you to seek out legal counsel.

Filing a Report With a State Insurance Board

If you believe that an insurance company has demonstrated bad faith with for your insurance claim, you may bring the case to your state’s insurance board. Every state has an insurance board and in California that is the California Department of Insurance. You can find out more information about them here: http://www.insurance.ca.gov/.

California Department of Insurance

The California Department of Insurance has a process for filing complaints against insurance companies for bad faith tactics. Upon filing a report, the California Department of Insurance will start an investigation into your complaint. The California Department of Insurance will advise you to try and reach a solution with the insurance company first. We encourage you to seek legal counsel before determining whether or not you have exhausted all reasonable attempts. If the California Department of Insurance finds a pattern of bad faith, the board will notify the insurance company and could penalize the insurance company if it does not provide an appropriate solution.

Possible Punitive Damages

Punitive damages may be awarded for an insurance company engaged in bad faith tactics. Punitive damages are awarded not as compensation, but to punish the defendant and send a message to prevent other insurance agencies from engaging in similar practices. Punitive damage awards are given when the defendant is shown to have acted in a manner that was malicious, reckless, fraudulent, and or deliberate.

How an Attorney can Help You

Bridgewater Law Group is highly adept to take on a variety of multi-layered, complex legal matters. The State of California has set high standards for insurance companies. For us, success is about being an advocate for our clients and holding the guilty parties accountable. We value transparency, establishing and maintaining quality client relationships, and hold ourselves to the highest of standards for our clients and for the law.

No Fee Unless We Win

We work on a contingency basis, which means there is no cost to you unless we win. Call us today for a free 30 minute consultation. During this consultation we can advise on whether you have a legal cause for action and how to proceed.

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