This blog was written to help people speak with insurance companies when their provider is dealing in bad faith. This is when an insurance provider mistreats you or denies a claim they otherwise should have covered. The longer name for it, the one you may hear attorneys use, is a breach of the covenant of good faith and fair dealing—but “bad faith” for short.
Why is this important to you? Everyone has some form of insurance; often, when you speak with an insurance company, there is no need to get an attorney involved. Because it doesn’t make financial sense to have legal counsel present, you must deal with the company directly. Due to how much power they have compared to most individuals, they may throw a series of roadblocks in front of you by asking for specific information or documentation. This creates delays, and the average person doesn’t know whether they are doing this strategically or because they genuinely need these items.
There is a conflict of interest between you and the insurance company. They collect premiums from you, and paying out claims impacts their profitability. Always keep in mind that they are for-profit companies. The reason we have insurance commissioners and regulations is mainly because insurance companies want to keep your premiums.
Personal injury attorneys regularly deal with insurance companies because it is one component of getting the best results for their clients. Lawyers in this field have to advocate for a person’s injuries and what they have endured because of them, and they have to understand bad-faith negotiations. The defendant typically has insurance and likely wants the insurance company to pay what they are liable for.
Protections in California
Look up California Code & Regulations (CCR) 10 Section 2695.7 to show you this in practice.
“Upon receiving proof of claim, every insurer, except as specified in subsection 2695.7(b)(4) below, shall immediately, but in no event more than forty (40) calendar days later, accept or deny the claim, in whole or in part. The amounts accepted or denied shall be clearly documented in the claim file unless the claim has been denied in its entirety.”
Though that is a small portion of it, understand that California has a lot of regulations to protect people from unfair practices. We are going to be talking about three in particular. One is that they can’t discriminate against you based on religion, race, age, or gender. The second is that Insurance companies must pursue a fair and objective investigation. And lastly, they should not make an unreasonably low settlement offer.
Real-Life Examples
We represented a Persian family that had been a robbery victim. Someone broke into their home and stole several items, including artifacts and Persian art. They had an insurance broker, and the broker was aware that they had Persian rugs. They were also under the assumption that the insurance company was going to pay for them. (At one point, the insurance broker attempted to purchase rugs from the family.)
This situation devolved into a massive dispute. To explain how severe it was, the insurance company began questioning whether a robbery occurred. The insurance company sent investigators to speak to the neighbors. And the way they were asking questions made it appear that the family that had been robbed were criminals. For instance, an investigator would ask if people had witnessed any criminal activity from the victimized family.
Ultimately, the insurance company refused to pay for the rugs, so we filed a lawsuit. We took dispositions to include the broker. The broker said the investigator claimed it was common practice for Persians and Armenians to fake these robberies. They even made comments about Mexicans being the salt of the earth. This is evidence of bias based on race. We can highlight these wrongs to show that the investigation was improper.
Howell, LLP
Consider the family who was robbed and accused of being criminals by their insurance company, partly based on race. We understand how frustrating dealing with an insurance company that acts in bad faith can be. Not only do you have the ability to fight back, but you can do so with our legal advice. We will publish another blog next month for more information and tips for dealing with insurance companies based on our encounters to support you. If you are ready to speak to an attorney, contact our office to set up your free consultation.
