Insurance Bad Faith Lawyer in Beverly Hills, CA
Every insurance policy in California includes an implied covenant of good faith and fair dealing. When an insurer unreasonably denies a valid claim, delays payment without proper investigation, lowballs a settlement offer, or otherwise mishandles a claim, the policyholder may have a separate "bad faith" claim against the insurer — on top of recovering the underlying policy benefits owed. This can arise in the context of a first-party claim (your own insurer refusing to pay your own policy benefits) or in how an insurer handles a third-party liability claim against its insured.
Key Points
- California’s Unfair Claims Settlement Practices Act (Insurance Code § 790.03) sets out specific claims-handling practices insurers are prohibited from engaging in, which can support a bad faith claim
- A bad faith claim can allow recovery beyond the policy limits themselves — including, in appropriate cases, damages for emotional distress and punitive damages where the insurer’s conduct was particularly egregious
- Common bad faith conduct includes unreasonable delay in investigating or paying a claim, denying a claim without a reasonable basis, and failing to properly explain the reasons for a denial
- An insurer’s duty of good faith applies both to how it handles its own policyholder’s claims and, in a liability context, to how it handles settlement opportunities on behalf of its insured
Considerations
- Keeping detailed records of all communication with an insurer — dates, names, what was said — is valuable if a bad faith claim becomes necessary later
- A pattern of delay or shifting justifications for a denial is often more probative of bad faith than a single denial standing alone
- A bad faith claim is a separate legal theory from, but is often pursued in conjunction with, enforcing the underlying policy benefits themselves
California Law Note
The California Supreme Court recognized the tort of insurance bad faith in Gruenberg v. Aetna Insurance Co. (1973), grounded in the implied covenant of good faith and fair dealing present in every insurance contract — a legal theory that allows a policyholder to seek damages beyond the policy’s face value when an insurer’s claims handling was unreasonable.
Related Questions
How long do I have to file a personal injury claim in California?
Most personal injury claims in California must be filed within two years of the date of the injury (Code of Civil Procedure § 335.1). Claims against a government entity have a much shorter deadline — generally six months to file an administrative claim before any lawsuit can proceed. Some claim types (such as certain product liability or medical malpractice matters) can have different rules. Because the right deadline depends on the specific facts, it’s worth confirming yours directly rather than assuming the general two-year rule applies.
View this answer on its own page →See more detail on our main site: Insurance Bad Faith →
Attorney Advertising. Prior results do not guarantee a similar outcome. This page is general information, not legal advice, and does not create an attorney-client relationship.
Discuss Your Insurance Bad Faith Needs — Free
Free consultation. No fee unless we recover compensation for you — case costs may still apply regardless of outcome; ask us for the specifics in writing.