Most people in California have at least one type of insurance policy in their name but it is not uncommon to hold multiple insurance policies. These might include some combination of automotive insurance, homeowner's insurance, renter's insurance, health insurance, life insurance and disability insurance. Regardless of the type of policy and what it is designed to cover, it is reasonable for you to expect that the insurance company will appropriately protect and compensate you when you have a legitimate claim. Unfortunately, this does not always happen.
When making a homeowners' insurance claim, you trust the company you work with will find a satisfactory resolution to your problem. However, this is not always the case. Insurance claims are often denied, or pay out less than you're expecting. Nerdwallet explains some of the steps you can take to dispute a denied insurance claim.
Californian residents like you rely on your insurance for vital, every-day things. This can include medical procedures, medication, routine doctor visits, and other things that your life and well-being rely on. When insurance companies refuse to honor their policies, it can be a huge blow.
Bad faith occurs when one party of a legal contract acts dishonestly to avoid fulfilling his or her contractual obligation. Bad faith may also occur when one party enters a legally binding agreement without any intention or the means to fulfill it. California, like most other states, recognizes an "implied covenant of good faith and fair dealing," which means that a party injured by the bad faith dealings of another may sue the offending parties for damages that result from the bad faith actions. Many parties across many industries are guilty of bad faith, but those within the insurance industry are particularly notorious for bad faith dealings.
You purchase insurance policies to protect you and your family in California from the consequences of a life-changing disastrous event. All too often, however, we at Pillsbury and Coleman have seen insurance companies go to great lengths to protect their profits and pay as little as possible on insurance claims. Sometimes, insurance companies may even turn on the very people they are supposed to protect by making false accusations of insurance fraud.
When you purchased your home about 10 years ago it was the home of your dreams. Like so many other responsible homeowners, the first thing you did was purchase a home insurance policy. However, recently, the home of your dreams was damaged and needs to be repaired. When you call to notify your insurance carrier of the damage, they inform you they are not responsible and will not pay for the damage and that you will have to pay for the repairs. What do they mean they will not pay? What can you do about it?
Some insurance companies offer lifetime disability benefits. They usually come at an additional fee (or premium) and are attached to the policy as an "endorsement" or "rider" to the policy. But not all lifetime coverage is created equal. Some policies - usually those that were issued in the 1980's or 1990's - merely continue your benefits for life without any restrictions or limitations. Benefits under these policies can even increase over time pursuant to a Cost of Living Adjustment (COLA) provision. These policies offer the broadest possible coverage. Other policies are not so generous. Their coverage may be contingent on when you become disabled or the type of disability that you are suffering from. For instance, some policies provide reduced benefits if you are disabled after age 60. Others provide for reduced benefits if you are disabled as a result of a sickness rather than an injury. The point: it pays to read your policy and know your rights.
Earlier this year, the Supreme Court provided additional guidance on punitive damage awards in insurance bad faith actions. The decision, Thomas Nickerson v. Stonebridge Life Insurance Company (June 9, 2016) 63 Cal.4th 363, held that the ratio of punitive damages must include an award of Brandt attorneys' fees in its calculation. Nickerson involved a denial of medical benefits under an indemnity policy. The insured was a paraplegic who broke his leg when he fell from his wheel chair. He was hospitalized for a total of 109 days, but his insurer only paid benefits for 18 days, and denied coverage for the remainder without speaking with his doctors. The insured filed suit. At trial, he was awarded an additional $31,500 in benefits, $35,000 in emotional distress damages, and $19 million in punitive damages. The parties also stipulated to an award of Brandt attorneys' fees in the amount of $12,500. The trial court then reduced the punitive damages award from $19 million to $350,000, reflecting a single digit ratio based on the $35,000 emotional distress award only, citing State Farm Mutual Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408. The Supreme Court disagreed with the calculation. It held that the Brandt fee award must also be taken into account when calculating punitive damages because it is an item of compensatory damage.
The state of California has proposed changes to insurance jury instructions. The impact of these changes could have a negative effect on consumers.
Most of us are covered by disability policies through our employers. Premiums are paid by payroll deductions and coverage is described in a summary plan description. Those policies (subject to a few exceptions discussed below), are governed by federal law, specifically, the Employee Retirement Income Security Act of 1974 ("ERISA"). These laws provide strict requirements for appealing a claim denial, as well as limited remedies for those whose disability benefits are wrongfully cutoff by their insurance carrier. No matter how misguided an insurer's decision is, the only remedy for insureds under ERISA is (1) the payment of past disability benefits owed by the carrier and (2) the possible recovery of attorneys' fees. In most circumstances, nothing else is recoverable.