Compensatory Damages for Wrongful Insurance Claim Denials in California
When an insurance claim is wrongfully denied, the impact on policyholders can be severe, leaving them without crucial financial support during challenging times. In California, if your insurance claim was denied in bad faith or in violation of the law, you may be entitled to compensatory damages. What exactly are compensatory damages, and how do you get them? We explore these vital issues below. If you believe that your life, health or disability claim was wrongfully denied, contact Gianelli & Morris for a consultation with a knowledgeable and experienced California insurance law attorney.
What Are Compensatory Damages?
Compensatory damages are monetary awards intended to compensate the injured party for the losses they have incurred as a direct result of another party’s wrongful action. In the context of insurance claim denials, these damages are designed to cover what the policyholder would have received had the claim been rightfully paid. These damages can include not only the amount initially claimed, e.g., the cost of the service or the benefit due under the policy, but also other proven financial losses caused by the denial.
Grounds for Compensatory Damages in Insurance Claims
Under California law, insurance companies are bound by the covenant of good faith and fair dealing, which is implied in every insurance contract. This means insurers are expected to act fairly and not deny claims without a reasonable basis. When an insurer fails to uphold this obligation, and a claim is denied without reasonable grounds or for improper motives, it constitutes bad faith.
Examples of actions that might constitute bad faith include:
- Denying a claim without sufficient investigation.
- Failing to communicate pertinent information to the claimant.
- Refusing to pay a claim without explaining why.
- Delaying claim processing without just cause.
- Claiming a medical procedure is experimental or isn’t medically necessary when the facts clearly show otherwise
- Rescinding a life insurance policy to avoid paying a claim
If you can prove that the insurer acted in bad faith, you may be entitled to compensatory damages beyond the policy limits.
Calculating Compensatory Damages
The calculation of compensatory damages in cases of wrongful insurance claim denial includes:
- Policy Benefits: The actual benefits due under the policy.
- Consequential Damages: Additional losses that occur as a result of the denial, such as medical expenses, emotional distress, and financial instability caused by the lack of insurance benefits.
- Interest: Often, courts will also include interest on the unpaid benefits from the date the claim should have been paid.
It is important for policyholders to maintain detailed records of all expenses and losses related to their insurance claim and the denial thereof. This documentation can be crucial in substantiating the claim for compensatory damages.
Legal Support for Pursuing Compensatory Damages
Navigating the complexities of insurance law and the pursuit of compensatory damages requires skilled legal representation. An established law firm that restricts its practice to insurance law can provide the necessary expertise in handling bad faith insurance claims. They can help gather the required evidence, negotiate with the insurance companies, and, if necessary, litigate to ensure fair compensation is awarded.
For California residents facing wrongful denials of disability, life, or health insurance claims, consulting with a knowledgeable attorney who understands the intricacies of insurance law and bad faith litigation is critical. These professionals can guide you through the process, help assert your rights, and work to secure the compensatory damages you deserve for the undue hardships experienced due to the wrongful denial of your insurance claim.
Contact Gianelli & Morris to Recover Compensatory Damages for Wrongful Insurance Claim Denials
If you believe your insurance claim has been wrongfully denied, call Gianelli & Morris in Los Angeles at 213-489-1600 for a free consultation. With our expertise in California insurance law, we can skillfully evaluate your case and help you understand your options for recovery. Remember, in matters of bad faith insurance denials, you are not just fighting for the denied claim but also for the broader principle of fair and just treatment under the law. Let us be your partner in this pursuit.
