Insurance companies (especially automobile) are denying more claims these days, which still amounts to bad faith. You pay insurance premiums faithfully so they will be there if and when you need them most. We are seeing a rising trend in denial or delay of coverage on auto damage cases. If your insurance company fails to honor your claim when you need them most, call a Fresno Bad Faith Lawyer today to determine whether the insurance company has followed the law in California as it relates to the handling of claims by an insurance company.
WHAT DOES IT MEAN TO ACT IN “BAD FAITH”?
Insurance bad faith is a legal term that describes the actions of insurance companies when handling claims. As a result, policyholders may have claims against their insurance company for its bad acts. The law holds insurance companies certain standards because of their position of power. Consequently, under California Law, insurance companies owe a duty of good faith and fair dealing to their policyholders.
Most noteworthy, is often referred to as the “implied covenant of good faith and fair dealing” which exists in all insurance contracts. When insurance companies break this covenant, the insured person (or “policyholder”) may have a legal claims against their insurer.
DO YOU HAVE A CLAIM?
As a result, a Fresno Bad Faith Insurance Lawyer will help you determine whether the implied covenant of good faith and fair dealing is being properly honored by your insurance company. Call a Fresno Bad Faith Insurance Lawyer today to discuss the details of your case (559) 840-3240 or toll free (844) FRESNO1.
MORE ABOUT INSURANCE “BAD FAITH” TACTICS
Insurance companies owe several duties to their policyholders, of the most importance is acting in good faith. Other applicable duties vary depending upon whether the claim is a “first party” or “third party” claim.
A common first party claim is when an insurance company writes insurance on property that becomes damaged, like a home or vehicle. In that case, the insurer must investigate the damage and determine whether the damage will be covered. If so, they must pay proper value for the damaged property.
A Fresno Bad Faith Insurance Lawyer can provide you with a list of the rights you have and duties owed to you by your insurance company.
FIRST PARTY BAD FAITH
Bad faith in a first-party contexts often involves an insurance carrier’s improper investigation and valuation of the damaged property. Bad faith also arises in the context of first-party coverage for personal injury such as health insurance or life insurance. A Fresno Bad Faith Insurance Lawyer can advise you whether your rights have been violated.
INSURANCE COMPANIES OWE A DUTY TO SETTLE ALL CLAIMS WITHIN YOUR LIMITS
In California, third-party coverage carries the duty to settle a reasonably clear claim against the policyholder within policy limits. This is to avoid the risk to the policyholder being hit with a judgment in excess of the value of the policy. The best example of this conduct is when you cause a car accident and a claim is filed by the injured party. The injured party makes a demand for your policy limits and your insurance company refuses to pay your policy limits. If the claim clearly merits policy limits your insurance company must pay.
Another way insurers breach their duties is by failing to defend or settle. As a result, it may be liable for the entire amount of any judgment obtained by a plaintiff against the policyholder. Hence, this includes a judgment exceeding policy limits. As a result of these precise actions of an insurance company, this was the holding of the landmark case of Comunale.
Also, notable, in California, a policyholder may be able to recover attorneys’ fees separately and in addition to the judgment for damages against a defendant insurer. The exists to the extent that those fees were incurred in recovering tort damages (for breach of the implied covenant) as opposed to contractual damages for breach of the terms of the insurance policy.
The allocation of attorneys’ fees between those two categories is usually a question of fact (meaning it usually goes to the jury).
Also notable, when an insurance company cancels your insurance policy after you file a legitimate claim, it may be illegal. This practice is known as insurance rescission. In California, post-claims underwriting is also known as investigating an insured’s application after a claim is filed. This conduct is against the law. Unfortunately for policyholders, many insurers continue to illegally rescind insurance policies. Consequently, it is an act of insurance bad faith for which the insured is entitled to damages. Consult with a Fresno Bad Faith Insurance Lawyer to discuss your rights (559) 840-3240 or (844) FRESNO1.
Assignment is a situation is where an insured is abandoned in bad faith by the insurance company. In this instance, the insured may make a special settlement agreement with the plaintiff. Sometimes this occurs after trial, where the insured has attempted to defend himself or herself by paying for a lawyer out of pocket, but went to verdict and lost (the actual situation in the landmark Comunale case).
Other times, it occurs before trial and the parties agree to put on an uncontested trial that results in a final verdict and judgment against the insured. The plaintiff agrees to not actually execute on the final judgment against the insured in exchange for the assignment of rights from the insured against his insurance company to the Plaintiff.
The second situation is where the plaintiff does not need to obtain a judgment first. Instead, he proceeds directly against the insured’s insurer under a state statute authorizing such a “direct action.”