In most cases, the need to use your insurance means something unforeseen has occurred.
It also means that without the protection your insurance provides, you would be put in a difficult financial situation.
You count on your insurance company to be there when you need it, but what if it isn’t?
Bad faith refers to an insurance company refusing to fulfill its obligation to cover a policyholder’s valid claim.
Several situations could lead to a case for a bad faith claim.
If your insurance company denies coverage for a valid claim, has delayed payment, or in any way refuses compensation for a legitimate claim, you should consider contacting an insurance bad faith attorney in Los Angeles.
The team at Starpoint Law understands that not receiving your insurance settlement can have life-changing consequences and put you in a dire situation.
We are here to fight on your behalf with compassion and integrity. We want to see you get what is rightfully yours.
California Bad Faith Insurance Laws
Insurance policies are contracts that hold the policyholder responsible for paying premiums.
In exchange for your payment, the insurance company provides coverage according to the terms of the policy.
Though seemingly clear on the surface, claims can become complicated.
Insurance companies are businesses, and to maximize profitability, some companies may deny legitimate claims or offer lower settlements than the claim is worth.
When a claim is inappropriately denied, policyholders have a right to file a cause of action for “bad faith” against the insurance company.
Deciphering the California Insurance Code can get complicated.
That’s why you need to choose bad faith insurance attorneys in Los Angeles who are experienced in the intricacies of this practice area.
What Constitutes Bad Faith in California?
A bad faith claim is applicable any time an insurance company fails to fulfill the terms of a policy agreement.
Insurance companies are legally required to act in good faith, meaning that they must abide by the terms of the contracts they enter.
California Insurance Code § 790.03 defines certain acts that constitute bad faith.
Some of these include:
- Unreasonably denying policy benefits,
- Misrepresenting facts or policy provisions,
- Failing to act promptly in response to a claim,
- Setting unreasonable standards for timeliness of investigations and claim processing,
- Failing to approve or deny claims in a reasonable time period following receipt of proof of loss,
- Refusing to make a good faith effort to settle a claim fairly when liability is reasonably clear,
- Failing to settle one part of a claim in order to influence another part,
- Attempting to settle a claim using an application that was altered without the knowledge of the insured or their agent,
- Failing to provide prompt justification for claim denial,
- Attempting to settle a claim for an amount that is unreasonable when compared to written or printed advertising material that accompanied the policy application, or
- Misleading a claimant as to the legal deadline for filing a claim or a lawsuit.
Each claim is unique. Your situation may not fit neatly into any of the above scenarios, but that does not mean you do not have a valid claim for bad faith.
If you feel like you were treated unfairly by your insurance company, it is advisable to consult with a bad faith attorney in Los Angeles.
Filing a Bad Faith Insurance Lawsuit
How you file your bad faith lawsuit depends on your situation.
It is essential to have an insurance bad faith attorney in Los Angeles to support you and help you strategize the best way to move your case forward.
There are two different types of bad faith lawsuits depending on which party’s insurance company is involved.
First-Party Bad Faith
If your own insurance company acted in bad faith, you will file a first-party insurance lawsuit. This type of claim is similar to an action for breach of contract.
Some policies outline requirements for how to navigate the dispute, which may include provisions like mediation or arbitration.
Third-Party Bad Faith
If you have filed a claim with someone else’s insurance and the company is acting in bad faith, you will file a third-party claim.
California does not allow third-party bad faith claims, which means your bad faith insurance attorney in Los Angeles will help you file a claim against the negligent party.
Then, the negligent may have an option to file a bad faith claim against their own insurance company.
Damages for Bad Faith
If the court finds that the insurance company acted in bad faith, you may be awarded damages.
The amount of your award will depend on several factors, including the circumstances surrounding your claim, the costs that need to be covered, and the behavior of the insurance company.
Compensation may include:
- The total amount of the settlement that you are owed for expenses incurred;
- Non-economic damages, such as pain and suffering;
- Attorney fees; and
- Punitive damages.
Punitive damages are awarded only if the court believes the insurance company should be punished for the way it behaved.
These damages are meant to deter the insurance company and other similarly situated companies from behaving this way.
Insurance Bad Faith Attorney in Los Angeles
If you believe the insurance company you are dealing with is not being honest or is unfair, the attorneys at Startpoint Law can help you evaluate your claim and determine if you should take legal action to get the compensation you deserve.
Our team understands the intricacies of Los Angeles bad faith claims and what to expect when going up against insurance companies of all sizes.
Contact us to schedule your case consultation.