An insurance company owes its insured the duty of good faith and fair dealings. When the insurance company breaches that duty it acts in bad faith and can be responsible for the damages it causes. The California insurance bad faith attorneys at Cheong, Denove, Rowell & Bennett know that insurance companies often put their own financial interests ahead of their insured’s interest. When that happens the insured needs a law firm that has the experience and ability, desire and courage to fight for their rights.
When you buy insurance, you buy a promise from the insurance company to protect you in times of need. An insurance policy is a contract like any other contract. However, given the great disparity in bargaining power between an insurance company and most insured’s, the law imposes a greater obligation of good faith and fair dealing in the way an insurance company is to deal with its insured’s. Accordingly, if the insurance company acts unreasonably in the handling of an insured’s claim, it may be also liable for breach of the implied good faith and fair dealing, commonly referred to as “bad faith.”
Examples of Insurance Bad Faith
The following are some examples of instances where an insurance company acts in bad faith toward its insured.
- Withholding policy benefit;
- Repeatedly asking for additional information to support a valid claim;
- Denying a claim based on arbitrary or unreasonable standards;
- Failing to state in writing the reasons why a claim is denied;
- Failing to evaluate a claim objectively ;
- Refusing to defend an insured who has been sued;
- Engaging in a pattern of unfair insurance practices;
- Misrepresenting insurance coverage;
- Groundless attempt or threat to rescind an insurance policy;
- Relying only on information favorable to the insurance company, while ignoring evidence in favor of the insured;
- Refusing to settle a lawsuit against an insured after a reasonable demand has been made.
Typical Insurance Bad Faith Defenses
- Insured lied or misrepresented information on the insurance application;
- Insurance company relied on advice of its lawyers;
- Insurance company acted properly;
- Genuine dispute as to the facts upon which the insurance company relied;
- Insured had previously released the insurance company for its bad faith conduct.
If the insurance company is found to be in bad faith, the company may be responsible for the following:
- Pay the insured the amount due under the policy;
- Pay prejudgment interest ;
- Pay the insured’s attorney fees and costs ;
- Pay the insured damages for the emotional distress the insurer’s bad faith conduct caused ;
- Pay punitive damages if the bad faith conduct is found to be malicious, oppressive or fraudulent.
When an insurance company is sued for bad faith, it has the money to have the best defense attorneys. At Cheong, Denove, Rowell & Bennett we believe the victim of insurance bad faith has the right to an attorney with at least as much experience. The insurance bad faith attorneys at Cheong, Denove, Rowell & Bennett have successfully handled matters against numerous insurance companies including: Aetna, A.I.G., Allstate, Amica Mutual, Automobile Club of Southern California, Blue Cross, Carolina Casualty, Century National, Crusader, Employers Casualty, Farmers, Hartford, Humana, Kaiser, Reassure America, Safeco, Standard, State Farm, Truck and Unum – Provident. The attorneys at Cheong, Denove, Rowell & Bennett have lectured extensively and have authored articles on liability, damages and trial practice.