Insurance Claims Denied Without Good Reason Could Be Insurance Bad Faith
What is insurance bad faith?
Insurance companies are businesses, and in order to stay in business, many of their decisions must be made to protect their bottom line. When these decisions cost their policy holders money, or claims are unreasonably denied, it is crucial to hold them responsible for their actions.
In a legal context the term “bad faith” refers to “dishonesty or fraud in a transaction, such as entering into an agreement with no intention of ever living up to its terms, or knowingly misrepresenting the quality of something that is being bought or sold.”
A breach of the duty of good faith and fair dealing is bad faith.
Under California law there is a duty of good faith and fair dealing implied in every insurance contract. It is an unwritten promise to treat you, the insured fairly. When an insurer unreasonably or without proper cause, denies a claim for insurance benefits, the insurer has breached the duty of good faith and fair dealing.
Examples of Insurance Bad Faith
There are several actions, or duties, that an insurer must follow to uphold the duty of good faith, including to:
- Insurers must thoroughly investigate claims and promptly settle claims where liability has become reasonably clear;
- Refrain from making “low ball” settlement offers;
- Reserve rights only where there is a good faith belief in the existence of the rights reserved.
Other examples of insurance bad faith include:
- An intent to deceive or mislead the policy holder to gain some advantage;
- Issuing a cancellation under an insurance policy (insurance rescission);
- Using unreasonable interpretations in translating policy language to avoid paying fairly on claims;
- Or having practices or policies in place that cause unreasonable delays in payment or that unreasonably deny benefits.
These are only a few examples of insurance bad faith — California’s insurance laws are not only lengthy, they are complex and it can be difficult for policyholders to know whether or not their insurance company made an honest mistake or if they purposely denied or delayed your claim. If your claim was wrongfully denied or you suspect your insurance company has acted in bad faith, it is important to seek the counsel of an experienced attorney. By filing a bad faith lawsuit, our legal team can attempt to recover damages outside your benefits coverage. These damages can include attorneys’ fees and emotional distress.
Fight Back Against Unfair Insurance Practices — Contact A Long Beach Insurance Bad Faith Attorney Today
The insurance bad faith attorneys at Donahue & Horrow, L.L.P., have decades of experience guiding clients through even the most complex cases. An insurance carrier has a duty of good faith that is implied in its contract with the policy holder. This duty of good faith and fair dealing means that benefits claims must be given the proper consideration before a final decision or payment is made. If a claim is denied unreasonably, or without the proper consideration, it is said that the company has acted in bad faith. In these situations, our firm can file a lawsuit to attempt to reverse its decision.
To learn more about how our attorneys can help you, schedule a free consultation today. We represent clients in Long Beach, Los Angeles and other communities throughout Southern California. Call us at 877-664-5407 or contact us online to schedule an appointment.
More Information About Insurance Claims And Disputes
- Denied Insurance Claims
- Disability Insurance Claims
- Health Insurance Claims
- Insurance Bad Faith
- Insurance Fraud and Agent Misrepresentation
- Life Insurance Claims
- Problems With Insurance Companies in California
- Property Insurance Claims
- Specialty Insurance Claims
- Uninsured Motorist Accident Insurance Claims