When Insurance Companies Act In Bad Faith

The rules on insurance coverage are simple. Essentially, if the insured party (policyholder) suffered a loss under an insurance policy issued by the insurance company, and the insured presented a valid claim on that loss, the insurance company is obligated to honor the policy.

Insurance policies are contracts, and the failure to honor them is a breach of the contract. Any contract carries with it a duty that each party to the contract operate in good faith and deal fairly with the other. Refusal to pay a legitimate claim, or deliberately slow-paying or underpaying the claims, may constitute insurance bad faith, which is legally actionable under California and federal laws.

How I Help My Clients

It is a stunning blow when the insurance company fails to meet its obligations in your hour of need after you have faithfully paid your premiums month after month. If you have suffered losses due to insurance bad faith in California, The McMillan Law Firm, APC, is here to stand up for you. I have been successful in bad faith insurance lawsuits on behalf of individuals and small businesses in San Diego County and throughout Southern California.

I can help you if your insurance benefits for water damage, fire, business interruption, natural disasters, title issues or any other covered event have been unfairly limited, delayed or denied.

You Might Have A Bad Faith Insurance Claim If…

Insurance contracts are special because the insurance company has such an unequal bargaining position when its performance is due that the law has imposed special liability rules when insurance companies act in bad faith.

Bad faith arises when the breach is unreasonable, for instance, where the insurer deviates from the rules and standards that are imposed by industry practice, statute or the law. Bad faith can be overt, or may consist simply of inaction. Sometimes, insurance benefits are denied for justifiable reasons, but this is certainly not always the case. You might have a bad faith insurance claim if any of the following are true:

• Your policy benefits have been unreasonably denied
• The insurance company has misrepresented facts or policy provisions
• They are delaying payment or communication for no apparent reason
• They are pressuring you to settle for an unreasonable amount
• They have failed to justify the denial of a claim
• They have advised you not to hire a lawyer

Beyond delaying or denying legitimate claims, bad faith includes actions such as:

• Failing to investigate claims thoroughly and promptly
• Misrepresenting policy terms or coverage details to avoid payment
• Making threats or intimidating policyholders to deter them from pursuing valid claims
• Offering unreasonably low settlements that do not reflect the true value of the claim
• Rescinding policies without valid justification
• Unnecessarily requesting excessive documentation to delay claim processing

These practices violate the implied duty of good faith and fair dealing that insurance companies owe to their policyholders. If you suspect your insurer is engaging in bad faith, you may have legal recourse to enforce your rights.

As an attorney, I have the experience and knowledge to determine the true value of your claim. Together, we will scrutinize all relevant facts and the language of your policy to determine your insurance company’s obligations under California law. If it’s determined that they are acting in bad faith, I will apply maximum pressure to get them to finally treat you fairly so you can obtain the insurance benefits you need and deserve.

Types Of Insurance Affected By Bad Faith

Insurance bad faith can arise under various types of policies, including:

• Homeowners insurance: Denials for fire damage, water intrusion, theft or natural disasters
• Auto insurance: Refusal to cover accident-related repairs, medical bills or underinsured motorist claims
• Disability insurance: Unjustified rejections or delays in disability benefits
• Health insurance: Denial of coverage for necessary medical treatments
• Life insurance: Failure to pay death benefits promptly or disputing claims based on technicalities
• Business insurance: Wrongful denial of business interruption or liability claims

No matter the type of policy, the core issue remains the same: The insurer’s failure to honor its contractual obligations. Notably, insurance companies’ tactics to deny claims are remarkably similar across all these categories. I know their playbook and how to counter it.

Bad Faith Insurance Laws In California

California has some of the most robust protections for policyholders facing bad faith actions by insurers. As such, insurance companies must adhere to the California Unfair Insurance Practices Act, which outlines the specific prohibited conduct.

In a bad faith claim, California courts may award damages beyond the value of the policy. This can include compensation for emotional distress and punitive damages to deter future misconduct. Importantly, policyholders have a two-year statute of limitations to file a bad faith claim for a fair outcome.

What Your Claim May Be Worth

Damages can be substantial for a finding of bad faith against an insurance company. Apart from the contract damages, i.e., the benefit of the bargain, bad faith damages can include general damages for emotional distress, anxiety and humiliation. Further, the cost of the attorney’s fees incurred by the insured to obtain the benefits of the policy can be awarded. Finally, the insured can recover an award of punitive damages.

Speak With An Attorney Who Has Your Best Interests In Mind

If the insured fails to file suit timely for breach of contract or bad faith following the denial of the claim, then those claims may be time-barred as a matter of law. While actions on the insurance policy itself must be filed within four years of the breach, a claim for bad faith is subject in California to a two-year statute of limitations, which means now is the best time to start your claim.

Insurance companies have their own profits in mind. I’m here to fight for the interests of everyday Californians like yourself. To discuss your bad-faith insurance claim with an experienced attorney in La Mesa, contact my law offices online or by telephone at 619-577-4533.