Remedies for Bad Faith Insurance Practices
In the context of insurance practices, bad faith means that the insurer acted unreasonably or with an improper motive, typically in the context of denying a claim. Bad faith insurance is considered a “tort” in the law, which means a civil wrong committed by one party on another, for which the law provides a remedy. The main remedy provided in the law for a tort is financial compensation for the harm done, known as money damages. Several different types of money damages might be available in a given situation. Taken together, damages are intended to make up for the wrong and as nearly as possible put the party who was wronged in the same position as if the bad faith practice has never occurred.
Below you’ll find a description of the most common remedies for bad faith insurance practices when it comes to health insurance denials and life insurance denials in California. If you have had a claim wrongfully denied, Gianelli & Morris can help you find justice by holding the insurance company accountable for their misdeeds and recovering a full and fair amount of compensation to make up for the harm you’ve suffered by their wrongful acts. For help statewide, contact Gianelli & Morris to speak with a member of our team of highly skilled and proficient California bad faith insurance attorneys.
Compensatory Damages
The category of compensatory damages is the main type of damages in most civil cases involving negligence or misconduct. Compensatory damages are the amount deemed by a judge or jury to equal the amount of loss a party suffered. Compensatory damages are also sometimes referred to as “economic damages” or “actual damages.”
In the case of a health insurance claim denial, compensatory damages would generally be equal to the benefits due under the contract, as well as any additional damages that were caused by the insurer’s bad faith. These could include, for example, additional medical costs that the insured had to pay out of pocket because of the insurer’s wrongful denial of a claim.
In a life insurance claim denial, the compensatory damages would typically equal the amount of the death benefit that is supposed to be paid under the policy.
Consequential Damages
These are damages that arise as a direct consequence of the insurer’s bad faith actions. For instance, if an insured suffered additional harm because their medical treatment was delayed due to a wrongful denial of a medical procedure or medication, they may be able to recover consequential damages. Similarly, if the denial or delay in paying life insurance proceeds caused a beneficiary to lose their home to foreclosure because of an inability to keep up mortgage payments (the main reason many people buy life insurance in the first place), this loss may be a recoverable consequential damage.
Punitive Damages
Punitive damages are intended to punish the insurer for particularly egregious behavior and deter others from similar conduct. In California, punitive damages may be awarded in insurance bad faith cases if the plaintiff can prove by clear and convincing evidence that the insurer acted with fraud, oppression, or malice.
Punitive damages are authorized in the California Civil Code section 3294, where they are referred to as exemplary damages since their purpose is “for the sake of example and by way of punishing the defendant.”
Bad faith insurance cases are prime candidates for punitive damages because bad faith practices by their nature go beyond ordinary negligence or even gross negligence and often involve an improper motive on the part of the insurer to defraud or otherwise harm the policyholder. Bad faith insurers know what they are doing is wrong and do it anyway, which is conduct the state of California (and a local judge or jury) would likely deem worthy of punishing and setting an example.
Emotional Distress Damages
In some cases, if the insured can prove that they suffered significant emotional distress as a result of the insurer’s bad faith, they may be able to recover damages for this harm. Bad faith insurance practices that cause a policyholder to miss out on a needed medical procedure or cause a delay in payments to the beneficiary of a life insurance policy are likely to create significant emotional distress. Emotional distress damages are often tied to cases where a physical injury has also occurred, making them more likely to accompany a bad insurance case involving a health insurance claim denial than a life insurance bad faith claim. However, California does recognize cases for emotional distress without a physical injury, including claims of negligent infliction of emotional distress and intentional infliction of emotional distress.
Contact Gianelli & Morris for Help With Remedies for Insurance Bad Faith Practices in California
Gianelli & Morris is one of the leading California law firms taking on insurance companies like Anthem Blue Cross of California, Aetna, CIGNA, United Healthcare and many others, holding them accountable to the people they have harmed through improper, unlawful and bad faith insurance practices. Located in Los Angeles, our experienced team handles cases throughout Southern California and statewide. If you have been the victim of bad faith insurance practices related to a health or life insurance claim in California, call Gianelli & Morris at 213-489-1600 for a free consultation.
