Basics to California Bad Faith Insurance Laws

California bad faith insurance laws

When you purchased an insurance policy for whatever kind of coverage you needed, we imagine you signed a lot of paperwork.

And in your insurance paperwork, your insurance carrier made multiple promises to you, right?

Well, the promises your carrier made to you in your insurance policy are contractual promises.

And if your carrier did not follow through on its contractual obligations, it could be liable to pay you damages in a California insurance bad faith lawsuit. 

Initiating and maintaining a legal claim against bad faith insurance in California can be challenging, but our Starpoint Law attorneys can help you.

We consistently handle complex matters, and we handle them successfully. 

What Is a Bad Faith Insurance Claim? 

Every contract comes with an implied promise of good faith and fair dealing in California. An insurance bad faith claim can arise when an insurance company fails to fulfill this implied promise. 

Under the implied promise of good faith and fair dealing, neither you nor your insurance company can take unfair actions to interfere with the other party’s rights to receive benefits under the terms of your insurance policy.

An insurance carrier cannot deprive you of insurance benefits by failing to act or acting unreasonably. 

Unfortunately, your insurance company might treat you unfairly in hopes of protecting its finances.

And even if your insurance carrier does not intend to deprive you of coverage, it could still be liable to you under an insurance bad faith claim in California if you were denied benefits because the carrier acted without proper cause. 

An insurance company can act in bad faith in many ways, including:

  • Failing to pay or defend a covered claim after receiving proper notice from the policyholder;
  • Delaying a payment required by the policy;
  • Failing to properly investigate a claim; 
  • Failing to inform a policyholder about their rights under a policy; and
  • Refusing to accept a reasonable settlement demand.

If your insurance company engaged in one of the listed behaviors and denied you coverage on a claim, you could have a right to sue the company for damages. 

Filing a Bad Faith Lawsuit

Insurers that have acted in bad faith are responsible for compensating the insured parties they harm.

In a bad faith claim, you can recover the following types of compensation for your damages:

  • Payment for your financial losses,
  • Compensation for your pain and suffering,
  • Attorney fees, and 
  • Exemplary damages to punish an insurer that engages in fraudulent, oppressive, or malicious conduct. 

You could have as few as two years to file your lawsuit, so it is crucial that you speak to an attorney right away about your rights and obligations. 

Contact Starpoint Law Today

At Starpoint Law, our California attorneys have an impeccable history of client representation.

In fact, we have never lost a case. We handle complex matters, and we give our clients the personal attention they deserve every step of the way.

If you have been mistreated by your insurance company, we can help you hold that company accountable.

Reach out to us online or call us at 310-564-7197 for a consultation. 

Author Photo

Aidin Ghavimi

Aidin is a partner at Starpoint LC, Attorneys at Law, and focuses on personal injury and employment law cases in and around Southern California. He earned his Juris Doctorate from the Loyola School of Law and his Bachelor’s from USC. Aidin’s primary goal is to bring justice to his clients and to ensure they are able to move on with their lives after a serious injury.

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