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Over Two Decades Of Holding Insurance Companies Accountable

What happens when insurers reject valid claims

An injury or property damage can be utterly devastating. Sure, you have an insurance policy against the risk that occurred. Unfortunately, your insurance company might let you down by acting in bad faith. In the shocking California wildfire, at least 42 people lost their lives, while thousands were left homeless. In the tragedy, more than 8,000 properties were razed to the ground by the fires.

California is a high-risk fire area, and most properties owners have their structures insured. AIR estimates that the insured losses from the fire outbreaks range between 2 and 3 billion dollars as of 26th October. Per the law and the policies, insurance companies, regardless of the losses suffered, are expected to investigate, negotiate and settle the claims with ultimate honesty or in good faith.

California is a pioneer in bad faith statutes

The state of California is a leader in the bad faith insurance law with the Unfair Claims Practices act adopted in 1972. Cases of bad faith insurance conduct have been addressed by use of legislation and common law. You can file a lawsuit against an insurance company that acts in bad faith in settlement of a claim after an injury, death or loss or property.

Actions Constituting Bad Faith Practices by Insurance Companies in California:

1. Deliberate Delayed Investigation or Payment of Claims

An insurer may intentionally drag the investigation or delay to resolve the claim to prolong the entire process so the insured can stop pursuing.

For instance, an insurer may demand that the policyholder, the claimant or the physician of either hand in a preliminary claim report. After that, the insurance company may require the submission of certified proof of loss forms. Given that the two documents contain virtually similar information, the insurer will be acting in bad faith.

2. Not Acting in Good faith in Making Prompt, Fair and Equitable Settlement of the Claims Even When the Liability is Crystal Clear.For example, if a drunk driver hit you and he/she is held liable for the accident, then you’re eligible for payment for the losses suffered. If your insurance policy covers that risk, and after submitting the claim the insurer fails to settle it, then the act qualifies as bad insurance practices.

3. Deception or Deliberate Misrepresentations to Evade the Settlement of a ClaimIt's possible for an insurer to try to conceal the existence of a policy cover, so they're not compelled to pay you. Or they may fail to inform you of the deadline for filing the claim or avail the paperwork so you can submit your claim.

They may also change the language of the policy against you to evade the claim. At all times, insurance companies are to be truthful about the policy cover, and that amounts to actions in bad faith.

What should you do if you have been the victim of bad faith?

Undoubtedly, insurance adjusters are there to represent the interests of their insurance companies. However, where the insurer displays conduct that may be in bad faith to avoid settling the claim, you can take action. A personal lawyer can represent you so you can get what's rightfully yours. 

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*Please note, Pillsbury & Coleman, LLP does not handle car insurance claims.


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