Whether it’s home, auto, business, or any other type of insurance policy, you pay your provider monthly premiums for coverage. It’s only reasonable to expect that your insurance company will have your back if you ever have to make a claim. Unfortunately, insurance providers do not always act in the best interests of their clients. Sometimes they may make low-ball settlement offers or even deny your valid claim outright. When they do, you have a strong case for a bad faith insurance claim.
Bad faith claims in California
Laws surrounding bad faith claims differ from state to state. Many states follow the lead of California, recognizing a common-law cause of action against first-party insurers. Under California law, you must prove two elements to succeed in a bad faith case. First, you must show that benefits were withheld. Second, you must show that the reason for withholding benefits was unreasonable or without proper cause.
The insurance company’s role
Insurance providers should treat their clients reasonably and fairly when they make a claim. When investigating a claim, an adjuster should look just as strongly for reasons to pay a claim as they do for reasons to deny a claim. Your insurance company may be acting in bad faith if they are only interested in evidence to deny your claim.
Examples of bad faith insurance practices
Insurance bad faith can take many forms, including:
- Denying a claim for lack of coverage, even though you are covered under the policy
- Offering a settlement for a fraction of what your claim is worth
- Using “experts” to justify a lowball settlement or claim denial
- Unjustly delaying payment of your claim
It’s important to document all of your interactions with your insurance provider. Establishing a paper trail can help you put together a strong claim. A skilled legal professional can help you determine the best path forward.