Pasadena Bad Faith Insurance Lawyers
Insurance companies are supposed to look out for their policyholders, but sadly, this does not always happen. If you believe that an insurance provider is acting in bad faith after you filed an injury claim, you may have grounds for legal action. Both your own insurance company and third-party insurers are required to act in good faith during the claims process. Those who fail to do so may be held liable in a bad faith insurance lawsuit.
Policyholders who believe that an insurance company is unreasonably refusing to pay a claim should familiarize themselves with their legal options as soon as possible. It is important to act quickly to secure the funds that you are entitled to through your insurance policy. The team of Pasadena bad faith insurance lawyers at Dewitt Algorri & Algorri is ready to help you begin your bad faith insurance investigation today – call us at 626-568-4000 for a case evaluation.
What is a Bad Faith Insurance Claim?
An insurance company may be guilty of bad faith if the company refuses to meet its obligations to its policyholders, either by refusing to pay a legitimate claim or failing to properly investigate and process a claim within a reasonable amount of time. Common examples of bad faith insurance practices include:
- Misrepresenting the terms of an insurance contract to avoid paying a claim
- Failure to disclose limitations and exclusions of an insurance policy to policyholders before the policy is purchased
- Requesting unreasonable proof of a covered loss
These are just a few of the most common types of bad faith insurance actions. Insurers can act in bad faith in a variety of types of claims, including health insurance, auto insurance, homeowner’s insurance, life insurance, and any other type of insurance contract. If you believe that your insurance company is acting in bad faith, you should consult an attorney as soon as possible to discuss your legal options.
Insurance Company Obligations to Policyholders
While the terms of insurance policies may vary, insurance providers in the United States generally owe their policyholders several important duties:
- Investigations – Insurance providers are required to properly investigate claims and provide their findings and valuation to the policyholder who filed the claim. Failure to meet this duty or unreasonable delays in investigations may be considered bad faith.
- Indemnification – Insurance companies have a duty of indemnification, which requires the company to pay a settlement agreement or judgment against the policyholder up to the coverage limit designated in the policy. Companies that neglect their duty of indemnification may be held liable for bad faith.
- Defense of the policyholder – An insurance provider owes its policyholders a duty to defend against claims made against the policyholder, even if the lawsuit is not covered by the insurance policy.
- Reasonable settlements – If an insurance company refuses a settlement that would be beneficial to the policyholder because a lawsuit would put the policyholder at risk of damages beyond what is covered by the insurance policy, the insurer could be held liable for bad faith for failure to settle reasonably.
The interpretation of bad faith insurance may vary from state to state depending on statewide laws. Those who believe they are victims of bad faith insurance should speak with an experienced attorney who handles cases in their state. At Dewitt Algorri & Algorri, our attorneys have several decades of experience in California bad faith insurance cases.
Third-Party vs. First-Party Bad Faith Insurance Claims
A first-party bad faith claim is made by a policyholder against their insurance provider based on a wrongful denial, delay, or inefficient payment of an insurance claim. For example, someone who suffers a serious accident but doesn’t receive adequate compensation from their insurance company may file a bad faith claim. If the policyholder and their attorney can show that their claim was wrongfully denied or that the terms of their policy were violated in another way, then it’s possible they might have a viable bad faith insurance claim.
Third-party bad faith insurance claims typically arise when the policyholder is facing a lawsuit for alleged negligence that resulted in another person’s injury. In these cases, the insurance provider may come to the defense of the policyholder. If the insurer fails to act in the best interests of the policyholder during this process, they could be held liable for bad faith. An example would be declining a settlement offer that would likely limit the policyholder’s liability.
As a claimant, you may be entitled to collect more money than that provided by the wrongdoer’s insurance policy if the insurance company fails to pay your settlement demand. For this to occur, you must have a highly specialized lawyer – from the very beginning – who makes sure your claim technically complies with the law. Our lawyers are specifically trained for this.
When Can an Insurance Company be Sued for Bad Faith?
Several states have legislation designed to protect policyholders from bad faith by their insurers. According to California Law 2330 – Implied Obligation of Good Faith and Fair Dealing Explained, all insurance contracts have an implied covenant of good faith and fair dealing. Insurance companies that violate this implied covenant may be guilty of acting in bad faith and could face liability if the policyholder files a lawsuit.
If you believe that your claim has been unfairly denied or that your insurance company has made an unfair payout offer, you may have grounds for a lawsuit against your insurer. Due to the complicated nature of these cases, it is usually best to discuss your case with an experienced bad faith insurance lawyer.
Contact Our California Bad Faith Insurance Lawyers
Insurance companies primarily look out for their own profits above all else. These companies increase their bottom lines by finding ways to deny or limit payouts for insurance claims. When an insurer engages in unfair tactics to deny their policyholders payouts that they are rightfully entitled to, the policyholders may have grounds for legal recourse by filing a lawsuit. The attorneys of Dewitt Algorri & Algorri can review the circumstances of your case and help you understand your legal options: contact us today at 626-568-4000 to learn more.