Guide to Insurance Company’s Bad Faith

Brad Nakase, Attorney

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Everyone knows that the
time when you actually need insurance the most is when something really bad happens. So, when it comes time to make a claim you rightfully assume that your insurance company will make good after payment of all those premium dollars.

One must keep in mind that insurance companies make their profits from collecting premium dollars, not by paying out claims. Too often an insurance company will seek to mitigate their losses through either the denial your claim, or an attempt to settle the claim for far less than the actual amount to
which you are entitled.

While you might not think about in these terms, your insurance policy is actually a contract between you and the insurance company. The insurance company is required to uphold their end of the bargain in good faith to pay out claims in exchange for your payment of premiums. When this doesn’t happen, insurance companies may engage in bad faith tactics to deny your claim. The Insurance Bad Faith Attorneys are experienced professionals in dealing with Bad Faith Insurance claims in San Diego and will provide you with aggressive advocacy to enforce your legal right to a fair settlement of your case:

Bad Faith-What is it?

There may be several paths toward pursing an insurance company for bad faith for its settlement of your claim. One of those paths may be to pursue a claim of bad faith as described in California’s Unfair Competition law. This law basically details three ways to show how bad faith insurance practices may qualify as unfair competition;[i] (1) they are unlawful; the insurer’s obligation to act fairly and in good faith to meet its contractual responsibilities is imposed by the common law, as well as by statute;[ii]  (2) they are unfair to the insured; unfairness lies at the heart of a bad faith cause of action; (3) they may also qualify as fraudulent business practices.

Under the Unfair Competition Law, it is only necessary to show that the plaintiff was likely to be deceived and suffered economic (financial) injury as a result of the deception.[iii]

Evaluating of Your Case

The Insurance Bad Faith Attorneys will evaluate your case to determine the best strategy moving forward. We will conduct a thorough review of the concerned insurance policy to determine if the insurance company has met its obligations owed to you based upon the language of the policy. In other words, did they do what they were required to do based upon the “four corners” of the contract, such as conduct a thorough investigation of your claims and make timely payment for your losses.

Pursuing the Claim

Due to our involvement in the case, it may be possible to reach a settlement on your behalf with the insurance company which than results in compensation paid to you in accordance with the terms of the policy. This often happens when insurance companies evaluate their own actions and determine that they are unlikely to prevail if a lawsuit is filed against them. In cases where the insurance company resists settling your claim despite their clear obligation to do so according to the policy, you may be able to bring legal action against them for claims under common law and the California Unfair Competition Law (“UCL”):

Cal Bus & Prof Code § 17200

“As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising….”

To state a claim under the Unfair Competition Law, you do not need to plead and prove the element of a tort (example: fraud); instead, you only need to show that members of the public are likely to be deceived. [iv] 

Insurance companies are prohibited from having certain exclusions in their policies which are against public policy, and which impermissibly narrow the scope of insurance coverage.[v] Insurance companies are also prohibited from engaging in post claims underwriting. This practice involves using statements that you made in an application for an insurance policy to later void the policy after a claim.[vi]

We Fight to Win!

When the Insurance Bad Faith Attorneys take on your case we fight to win! You already know that dealing with insurance companies can be a monumental undertaking. We have the knowledge, dedication and experience to deal with the insurance company, and we will work hard to get you the financial compensation you deserve. We know that you counted on the insurance company and they let you down. Let us earn your trust and make you whole again!

Call or Write for a Free Confidential Consultation

If you or someone you love need an aggressive and compassionate attorney who will listen and aggressively protect your interest, we invite you to call attorney Brad for a free consultation.

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Legal Reference

[i]  State Farm, supra, 45 Cal.App.4th at p. 1107

[ii]  Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 574

[iii] Kwikset Corp. v Superior Court, supra, 51 Cal.4th at p. 322

[iv]  Korea Supply Co. v. Lockheed Martin Corp. (Cal. Mar. 3, 2003)

[v]  Daun v. USAA Casualty Ins. Co. (Cal. App. 4th Dist. Jan. 4, 2005)

[vi] Ticconi v. Blue Shield of California Life & Health Ins. Co. (Cal. App. 2d Dist. July 30, 2007)

Cal Bus & Prof Code § 17200

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