Businesses that purchase insurance expect that they will reap these benefits when they need them, as long as those are in line with the policy. Unfortunately, this isn’t always the way that the situation will work out. There are times when insurance companies won’t operate in good faith, which means that the businesses might not reap the policy benefits when they should.
When you are dealing with an insurance company for a claim, you have every right to expect that the claim will be handled fairly, in an appropriate manner, and in a timely fashion. When this doesn’t happen, your company might have a case for making a bad faith insurance claim.
What is bad faith?
Typically, the insurance company must handle claims in accordance with the terms of the policy. This means that they can’t avoid approving a claim based on a desire to keep their expenses down. Instead, if the case meets the requirements for a valid claim, it should be approved.
There are several reasons why a claim might be denied. However, that reasoning would have to be unreasonable in order to qualify for a bad faith claim. This can be a claim that is denied without taking the terms of the policy into account or one that is denied without any reason.
What does California law say?
All states have their own laws related to bad faith insurance claims. In California, there are several different factors that can help you to prove a bad faith claim. Just having one of these present won’t make your case an open and shut one, but it can help you to establish your side of the matter.
- The insurance company doesn’t provide a reasonable explanation for the denial.
- The insurer fails to acknowledge or act on the claim promptly.
- The insurance company misrepresents the scope of coverage or other relevant facts of the case.
- The insurance company doesn’t investigate or process claims using reasonable standards.
- The insurer doesn’t approve or a deny a claim within a reasonable timeframe.
Not all bad faith claims are based on an outright denial. In some cases, you might not get the full settlement or benefits that you are due. When this is the case, you may be able to take action against the insurance company that isn’t handling your company’s claim in the manner that is dictated by the policy you purchased.