Failing to Investigate a Claim
When Californians purchase health or life insurance, they expect their insurers to act in good faith and investigate claims thoroughly and fairly. However, some insurance companies engage in practices that undermine this trust, including by failing to investigate claims on an individual basis. This failure is not only frustrating for policyholders, but it is also a violation of California law and may amount to bad faith under California Insurance Code Section 790.03(h)(3).
Failing to investigate a claim is a leading cause of insurance denials in California and one that companies like Anthem have been repeatedly called out on. If you find yourself in such a situation, contact Gianelli & Morris to consult with a team of experienced and successful California insurance bad faith lawyers who stand up for policyholders and help them get the vital benefits they bargained for and are counting on.
California Insurance Code Section 790.03(h)(3)
California Insurance Code Section 790.03(h)(3) specifically outlines that failing to adopt and implement reasonable standards for the prompt investigation of claims is an unfair practice in the business of insurance. The statute is part of California’s Unfair Insurance Practices Act, which is designed to protect policyholders from unethical and illegal actions by insurers. Under this law, insurance companies are obligated to investigate claims with diligence and fairness. When an insurer fails to do so, they may be acting in bad faith, and policyholders have the right to seek legal recourse.
Failure to Investigate as Bad Faith
A crucial aspect of handling insurance claims in good faith is conducting a thorough investigation based on the individual circumstances of each claim. When an insurer fails to investigate or applies blanket policies to deny coverage, they are effectively neglecting their duty to the insured. This kind of blanket approach not only disregards the specific details of a policyholder’s claim but also violates the fair claims handling practices set forth by California law.
For example, an insurance company might deny a medical treatment claim by referencing policy guidelines that exclude coverage for certain procedures. However, if the insurer fails to investigate whether the policyholder’s specific medical condition might make the treatment necessary or whether the policy contains any exceptions, this can be considered an improper denial and bad faith practice. Failing to consider an insured’s unique situation could be grounds for legal action against the insurer.
Anthem and Blanket Exclusions of Coverage
Anthem, one of the largest health insurers in the United States, has faced criticism and legal action for issuing blanket denials of coverage based on policy guidelines without properly investigating claims on an individual basis. Anthem, along with other insurers, has been accused of denying coverage for medical treatments, procedures, or medications by relying on broad, categorical exclusions in policy language rather than reviewing the details of each claim to determine if coverage should be provided.
For instance, Anthem has been fined hundreds of thousands of dollars by the California Department of Managed Health Care for automatically denying coverage for certain treatments or medications based on policy guidelines without investigating whether the insured’s condition necessitates the treatment. This practice ignores the nuances of the insured’s health needs and contravenes California’s requirement for reasonable claim investigations.
In such cases, policyholders may feel trapped by their insurance companies, facing expensive medical bills and being forced to forgo necessary treatments. Anthem’s blanket exclusions of coverage have been the subject of lawsuits, with policyholders alleging bad faith for the company’s refusal to investigate claims properly before denying coverage.
The Consequences of Failing to Investigate
When an insurer fails to conduct an individual investigation of a claim, they not only violate the terms of the insurance policy but also expose themselves to liability for bad faith. California courts have consistently held that insurers must act reasonably in their investigations and must not rely solely on policy exclusions to deny coverage. Insurers that engage in these practices may be subject to lawsuits, and policyholders may recover compensation for the denied benefits, attorney’s fees, emotional distress, and even punitive damages.
Failing to investigate a claim also impacts the overall integrity of the insurance system. Insurance companies hold a significant amount of power over the lives of their policyholders, particularly when it comes to health and life insurance. By failing to investigate claims, insurers undermine public trust and violate the legal duties owed to policyholders under California law.
What Can Policyholders Do?
If your insurance company has denied your claim without conducting a proper investigation, you may have grounds for a bad faith insurance lawsuit. An experienced insurance law attorney can help you hold the insurance company accountable for their failure to comply with California law. At Gianelli & Morris, we represent health and life insurance policyholders who have been victimized by bad faith practices, including insurers’ failure to investigate claims on an individual basis.
Contact Gianelli & Morris Today
California law mandates that insurers investigate claims promptly and fairly. When an insurance company issues blanket denials of coverage without properly investigating the specific details of a policyholder’s claim, they are engaging in an unfair practice in the business of insurance under California Insurance Code Section 790.03(h)(3). If your insurer has denied your claim without conducting an individual investigation, you may be able to take legal action to recover the benefits you are owed.
At Gianelli & Morris, we are dedicated to fighting for policyholders who have been wronged by their insurance companies. If you believe your insurer has acted in bad faith, contact our firm today by calling us at 213-489-1600 for a no-cost consultation.
