Orange County Insurance Lawyer
Insurance Claims & Bad Faith in California
Most insurers are professional and ethical, interested in handling your claim with a minimum of friction and providing you with the coverage for which you have paid. But you should be aware that, once a claim is made, you and the insurer have different interests. You want to receive the largest indemnity check possible. Your insurer wants to write the smallest check possible. Of course, insurance companies will investigate the situation to see that you have held up your contractual obligations. They are entitled to do that. Save yourself and your insurer a lot of trouble and keep good records of your communications with the insurer. Put as much in writing as you can.
Problems arise when some carriers decide that the economic cost of a claim is so high that they will take almost any route to avoid paying it. An insurer wrongfully denying a legitimate claim is guilty of bad-faith failure to indemnify. You can recover extra damages if you prove bad faith on the insurer's part. The purpose of this rule is to change the calculus that makes it worthwhile for the insurer to stonewall you and dare you to sue. Certainly, if you are involved in a dispute involving unfair claims practices, communicate with your state's insurance commissioner and other consumer agencies.
How Do You File an Insurance Claim?
After an accident, natural disaster or any event that caused damages or loss to your property, you should reach out to your insurance company to file a claim. Different companies have different filing procedures, but they should be able to walk you through to the process. Do not wait to file your claim. There are statutes of limitations for filing certain types of insurance claims. Medical and dental health claims are usually filed by the administering practitioner.
What Reasons Do Insurers Give When Denying Claims?
Insurance companies are supposed to help their clients after an accident or loss. However, these companies are for-profit institutions, so they will always look for a way to save money. This can conflict with the claimant’s object of getting fair compensation for their damages. This often leads to insurance companies denying claims or adding deductions to minimize claims. Here are a few of the ways insurers try to get away with lowering your payout.
- Adjusters say the damages are less than what you claim
- Your deductible is higher than the damages you suffered
- Adjusters find you damages are ineligible or excluded from the coverage of your policy
- Insurer claims that no covered loss occurred
Though these can be common reasons for a reduced or denied claim, they do not mean your claim is worth less than you thought.
How Do Insurance Companies Mismanage Claims?
The insured rely on insurance companies to act in good faith based upon their policies. But mismanagement can confound this process. Such circumstances could delay or even prevent the resolution of your insurance claim. The following examples can lead to a dispute between you and your insurance company.
- Unnecessarily slow claims process
- Failure to effectively communicate with the policyholder
- Denial of a claim without a reasonable explanation
- Misinterpretation of the circumstances surrounding the claim
- Mishandling relevant claims details
- Failing to recognize all of the coverage options in your insurance policy
- Failure to pay specialists such as medical or dental care providers
The Insurer's Lawyer
Another area to watch is the behavior of the insurer's lawyer. Remember that liability insurance is litigation insurance. You are entitled to a full defense of claims against you. Insurers are not allowed to deny you a defense because they say the claim against you would probably not be covered under you policy. In most states, as long as the claim against you could be covered under a reasonable reading of the policy, you are entitled to a defense. Thus, if the complaint against you includes both intentional and negligent conduct, they must defend you as long as the negligence claim remains in the case. But take note: If the claim is successful, and the insurer was right in saying that you were not covered (i.e., in the case of intentional behavior), you must reimburse the insurer for its legal expenses.
Since the insurer is paying for the lawyer, it has the prerogative of directing the actions of the lawyer. But the insurer's lawyer has a legal obligation of loyalty both to you and to the insurer. Any time you have reason to believe that the lawyer is not looking out for you, or that the lawyer is favoring the insurer's interests over yours, you should have an Orange County insurance lawyer look into it.
For example, if a claim is made against you, but you have a legitimate defense, the lawyer should not be eager to settle for some amount above its policy limit that leaves you holding the bag for the remainder. A legitimate settlement is one thing, but if you suspect the insurance company wants to cut its losses and avoid legal fees, sound the alarm. In the event that such behavior can be demonstrated to the court, the judge may order the insurer to pay for your separate counsel—someone of your own choice—as well. In such a case the company has forfeited its right to choose your lawyer by not acting in accordance with its fiduciary duty to you.
Bad faith insurance claims are complicated, particularly when insurance providers use their expertise to mislead policyholders. Don’t let them get away with it. You have paid your premium; it’s time for them to pay you.
At Harris Grombchevsky, we are highly knowledgeable in bad faith insurance law. We have years of experience, vast resources, and a track record of success. Put our skilled, caring team on your side.
To speak with a Southern California bad faith insurance lawyer, call (888) 427-8064 or submit an online contact form here.