Bad things happen to good businesses and to good people. Most businesses and individuals carry insurance for this reason. But what happens when the insurance carrier denies payment on the claim without a reasonable basis for doing so? Or, what if the insurer fails to properly investigate the claim in a timely manner? Where can you turn for help?
Although most states have enacted statutes to prohibit bad faith claims practices and also elect insurance commissioners to regulate and control insurance claim practices probably the most effective means for policyholders to enforce their rights is to file a civil lawsuit with the help of an experienced bad faith insurance lawyer alleging “bad faith” against their insurance company for denial of the claim or failure to reasonably investigate the claim in “good faith”.
In California, the insurer’s duty to act in good faith means the investigation of the insured’s claim must be reasonable and requires that the insurance company give at least equal consideration to the insureds’ financial interest as it gives to own interest. This also means the carrier must do a thorough, complete, fair and unbiased investigation before it can deny a claim.
Furthermore, in California, an insurer also has a duty to accept a reasonable offer to settle a third party liability case within policy limits, and if the insurer refuses to settle, the insurer may be liable for the full amount of judgment. The types of damages a plaintiff may seek for insurer’s bad faith can include the value of the policy, emotional distress, punitive damages, and attorney’s fees.
One issue in insurance bad faith claims often relates to timing: most insurance policies require the insured to present a claim for coverage within a certain amount of time. If the claim is denied or if there is bad faith conduct, there is also another time limit (statute of limitations) within which the insured must bring a lawsuit against the company. These issues can get very complicated because there may be a dispute as to when the claim was denied and when the statute of limitations begins to run. If your claim is not being promptly investigated and resolved, contact experienced insurance lawyer and RPNA managing partner Drew E. Pomerance today.