How to Prove Insurance Bad Faith
Insurance is a safety net designed to protect us when unforeseen events occur. Whether it’s health, life, or disability insurance, policyholders rely on their coverage to provide financial support during difficult times. Unfortunately, insurance companies sometimes deny claims unjustly, engaging in what is known as “bad faith” practices. At Gianelli & Morris, we understand the emotional frustration and the physical and financial distress caused by such denials. That’s why we devote our California law practice to helping people get the insurance coverage they are entitled to while holding insurance companies accountable for the damage they have caused.
When insurance companies act in bad faith toward their insured, they can be liable for all the harm their bad faith conduct inflicted, including liability for punitive damages in appropriate cases. Key to this process is being able to prove – in court, if necessary – that the insurer acted in bad faith. Below we discuss the steps required to prove insurance bad faith. If your insurance claim has been unreasonably delayed or denied, or if your insurance company has otherwise mistreated you, contact Gianelli & Morris to discuss the situation with an experienced and successful California insurance bad faith lawyer.
Understanding Insurance Bad Faith
Insurance bad faith occurs when an insurer fails to fulfill its contractual obligations to the policyholder with an unreasonable or improper motive. This can involve denying a claim without a valid reason, delaying payment unreasonably, or failing to conduct a proper investigation into the claim. To successfully prove bad faith, you must demonstrate that the insurer acted unreasonably and without proper cause.
Key Elements to Prove Insurance Bad Faith
To establish a case of insurance bad faith, you need to prove the following elements:
1. The Existence of a Valid Insurance Contract. First and foremost, there must be a valid insurance contract between you and the insurer. This contract outlines the terms and conditions of your coverage, including what is covered and the procedures for filing a claim. One common bad faith tactic among life insurance companies is to allow the policy to lapse in violation of California law or rescind the policy unlawfully, thereby wrongfully claiming there was no insurance policy in force.
2. Unreasonable Denial or Delay of Claim. You may need to show that the insurer denied your claim or delayed processing it without a reasonable basis. This could involve ignoring evidence that supports your claim, misinterpreting policy language, or applying undue scrutiny to avoid paying the claim.
3. Failure to Conduct a Proper Investigation. Insurance companies are required to conduct a thorough and fair investigation of your claim. If the insurer fails to investigate properly or disregards key evidence, it can be considered bad faith. Documenting the lack of a proper investigation can be crucial in proving your case. Moreover, insurance companies are required to give you a reason for their action, including providing the records that support their decision.
4. Breach of Duty of Good Faith and Fair Dealing. Under California law, insurance companies have a duty to act in good faith and deal fairly with policyholders. If the insurer breaches this duty by acting unreasonably or dishonestly, you can hold them accountable for bad faith practices.
Gathering Evidence to Support Your Claim
Proving insurance bad faith requires substantial evidence. Here are some steps to help you gather the necessary documentation:
1. Keep Detailed Records. Maintain a detailed record of all communications with the insurance company, including emails, letters, and phone calls. Note the dates, times, and content of each interaction. This can help demonstrate the insurer’s unreasonable behavior or lack of response.
2. Obtain a Copy of Your Policy. Request a copy of your insurance policy and review the terms and conditions carefully. Identify the specific provisions that support your claim and any clauses that the insurer might be misinterpreting.
3. Document the Insurer’s Actions. If the insurer delays your claim, document each instance of delay and the reasons provided by the insurer. If your claim is denied, obtain a written explanation for the denial and gather any supporting evidence that contradicts the insurer’s rationale.
4. Seek Expert Opinions. In some cases, expert testimony can be invaluable. Medical professionals, for instance, can provide opinions on the necessity of treatments covered by health insurance, while legal experts can interpret complex policy language and highlight bad faith practices.
Legal Remedies for Insurance Bad Faith
If you successfully prove insurance bad faith, you may be entitled to various remedies, including:
-
Contractual Damages. These damages compensate you for the benefits you should have received under the insurance policy. This includes the value of the denied claim and any additional costs incurred due to the denial.
-
Consequential Damages. You may also recover consequential damages for losses that resulted directly from the insurer’s bad faith actions, such as additional medical expenses, lost income, or other financial hardships.
-
Punitive Damages. In cases where the insurer’s conduct is particularly egregious, you may be awarded punitive damages. These damages are intended to punish the insurer and deter similar behavior in the future.
Contact Gianelli & Morris to Prove Insurance Bad Faith and Hold Bad Actors Accountable
Proving insurance bad faith can be challenging, but with the right approach and thorough documentation, you can hold the insurer accountable for their unjust actions. If you believe your insurance claim has been wrongfully denied or delayed, call Gianelli & Morris at 213-489-1600 for a free consultation. Our experienced attorneys are dedicated to fighting for the rights of policyholders and ensuring you receive the benefits you deserve. Don’t let bad faith practices go unchallenged – let us help you secure the compensation you are entitled to.
