What are Insurance Bad Faith Cases?
Insurance Bad Faith refers to the legal relationship between a policy holder and their insurance company in which the law has created a duty that insurance companies act in Good Faith when handling claims after a loss. In California, acting in Good Faith means that insurance companies must treat you fairly and not put their interests in saving money above your interests in receiving policy benefits. If an insurance company is found to have acted in Bad Faith, the company can be liable to pay the original amount of loss, emotional distress damages, attorney fees, and punitive damages.
The conduct of insurance companies in California is governed in part by California Insurance Code §790.3 which states that the following conduct is prohibited:
- 1) Deceptive practices or deliberate misrepresentations to avoid paying claims.
- 2) Deliberate misinterpretation of record or policy language to avoid coverage.
- 3) Unreasonable litigation conduct.
- 4) Unreasonable delay in resolving claims or failure to properly investigate.
- 5) Use of improper standard to deny a claim.
- 6) Arbitrary or unreasonable demands for proof of loss.
- 7) Abusive tactics to settle a claim.
- 8) Compelling insured to contribute to settlement.
- 9) Failing to maintain adequate investigative procedures.
- 10) Failing to disclose policy limits and explain applicable provisions or exclusions.
Richards Willis PC is experienced in advising clients how to proceed after a flood/fire loss, litigating complex issues of coverage, and/or suing insurance carriers for acting in Bad Faith. Richards Willis PC represents members of the public, Public Adjusting companies, and trustees of the Federal Bankruptcy Court in forcing insurance companies to pay fair compensation to their insured. In the case of Garcia v. American Securities, Richards Willis PC was retained by a trustee of the Federal Bankruptcy Court to determine why an insurance company was not paying the replacement costs of a commercial building lost in a fire which was owned by the bankruptcy estate. After extensive negotiation, Richards Willis PC recovered a $1.1 million recovery on behalf of the bankruptcy estate.