Los Angeles Injury Lawyer Blog

Insurance bad faith refers to a claim by an Insured person against their insurance company for a claim that is wrongfully denied by the Insurer. In plain terms, this means that an insurance company must act in “good faith” toward a policy holder, and if they violate that obligation, many states allow the policyholder to sue the insurance company for insurance bad faith. If you are in this situation, you will need an insurance bad faith lawyer to represent you. Most states have specific laws that that regulate the insurance industry. In the 1970’s, California courts decided that policyholders could sue their insurance companies for bad faith, and several other states followed. Injury attorneys and accident lawyers are all too familiar with insurance companies trying to deny claims for any reason they can get away with. That is why it is important to have a lawyer on YOUR side, fighting for your rights, and to understand what your rights are. Your insurance company has lawyers and experts on their side defending them, and so should you.

According to California law, an insurance company must deal fairly (in good faith) with policyholders or Insureds. They must defend a claim or lawsuit against the policyholders, even if some or most of the lawsuit is not directly covered by the policy. And they have a requirement of indemnification, which means they must pay a judgment against the Insured, up to the policy limit, if the judgment is for an act covered by the policy. There are many examples of how an insurance company can commit bad faith insurance. One example would be if an Insurer fails to promptly and thoroughly investigate a claim. Other examples of bad faith would be an unreasonable delay of payment or an unreasonable denial of benefits to a claim. A policy holder is also protected against their Insurer using unreasonable interpretations in translating policy language or refusing to settle a case or reimburse a policyholder for the entirety of a loss. One prime example of bad faith occurs when an insurance company refuses to make a reasonable settlement offer in a case where the Insured is being sued, thereby putting the Insured at risk for a judgment that is in excess of the policy limits. If this happens to you, you can sue your insurance company for bad faith.

To prove bad faith, you need to show that your insurance company failed to honor your contract. If you feel that your insurance company is not acting fairly and in good faith toward you, you have the right to contact a lawyer. If you are located in the State of California, please contact us at the Law Offices of Greenberg & Rudman LLP for a free consultation.