What is Insurance Bad Faith Law? 

When an insurance company denies benefits under an active and enforceable California insurance policy on a legitimate claim, it violates the implicit covenant of good faith and fair dealing law in California, which is known as acting in “bad faith”.

In other words, if an insurance company handles a claim in an unfair manner, that is enough to demonstrate bad faith. You, as the insured, have the right to look for legal advice from a skilled bad faith insurance attorney when an insurance company acts improperly. The experienced Los Angeles insurance bad faith attorneys at ACTS LAW, LLP are here to help if an insurance company has unreasonably denied or handled a claim. 

Insurance Bad Faith Law in California

The state of California has more insurance policyholder protection legislation than any other state in the US. Case law from courts, the California Insurance Code, and the California Code of Regulations all contain references to insurance bad faith statutes that show what is considered bad faith action by an insurance company.

Many states define “bad faith” in different ways. California has many key examples that are considered “bad faith” actions by an insurance company, including, but not limited to: 

1. Refusing to pay a policyholder after they submit a valid claim. 
2. Not paying the entire value of a claim as underlined by the policy agreement. 
3. Purposefully taking too long to pay a claim. 
4. Failing to properly and fairly investigate an insurance claim. 
5. Failing to approve essential medical care to which a policyholder is entitled to through their health insurance policy.

If an insurance company in California has acted in bad faith, the policyholder and person who submitted the claim are entitled to recover all damages brought on by the bad faith actions of the insurance provider. 

Filing a Bad Faith Insurance Claim in California

Filing a lawsuit for insurance bad faith can be complicated, especially without the help of an attorney. The situation and bad faith actions of the insurance company will alter the type of claim that needs to be submitted. 

If there is first-party bad faith, meaning the policyholder’s insurance company committed bad faith, then that requires a first-party insurance bad faith claim. These claims are similar to filing for a breach of contract and will need to show that the insurance company violated the policyholder agreement and acted in unfair and bad faith practices. 

If a claim was submitted to another person’s insurance company, this is known as a third-party bad faith claim. In order to bring an action for bad faith dealings in these situations, an individual is required to file a third-party claim. In the event of a third-party claim, insurance companies have to adhere to California laws and consider the interests of all parties, regardless of whether or not they are a policyholder. 

Insurance Bad Faith Lawyers at ACTS LAW, LLP

If you have submitted a claim to an insurance company, and they have acted in bad faith or denied your claim, you may be eligible to file a bad faith insurance lawsuit. Contact the bad faith insurance lawyers at ACTS LAW, LLP to help fight against the insurance companies. Call us today at 888-ACTS-LAW or submit a message online.