Every insurance policy has an implied duty of good faith and fair dealing. This obligation keeps insurance companies from doing anything to deprive an insured person of the benefits and protection provided in the policy. When an insurance company unreasonably denies or fails to investigate adequately, it violates the implied duty of good faith and fair dealing.
Therefore, you can take legal action against the insurance company if your insurance claim is unjustly denied. Our California bad faith insurance lawyers at Kantor and Kantor LLP can represent you if you decide to challenge the insurance company’s decision.
Book a free case review with us by dialing 818-886-2525.
Why Choose Us?
We are people helping people challenge the bad-faith decisions of insurance companies.
We handle bad faith insurance (insurance bad faith) disputes, appeals, and litigation at Kantor and Kantor LLP. Our bad faith insurance lawyers have experience in individual and class action lawsuits involving:
- Health insurance
- Life insurance
- Short-term and long-term disability insurance
- Long-term care insurance.
We have over 20 years of experience helping our clients get their benefits from insurance companies who unjustly deny their claims. We have faced off against top insurance firms and secured favorable results. Also, our team will protect your rights and ensure you get what you deserve. Call us at 818-886-2525.
What is Insurance Bad Faith?
Insurance is meant to provide peace of mind and a safety net for individuals in times of need. Insurance companies are legally obligated to act in good faith in the handling of your claim. However, when an insurance company fails to fulfill its obligations in good faith, it can lead to devastating consequences for policyholders. Insurance bad faith is a legal term that refers to the improper conduct of an insurance company toward its policyholders. When an insurance company acts in bad faith, it violates its duty to deal fairly and honestly with its customers, often resulting in significant harm to the policyholder.
Simple mistakes do not constitute bad faith insurance.
An integral part of an insurance company’s duty is to seek evidence supporting the insured’s claim for benefits diligently. When the opposite occurs, and insurance companies attempt to deprive policyholders of the benefits and protections they are entitled to, they act in bad faith. If you suspect that your insurer acted in bad faith, consult our California bad-faith insurance attorneys.
The Implied Covenant of Good Faith and Fair Dealing
An implied covenant of good faith and fair dealing obligates insurance providers to thoroughly and promptly investigate a claim. Also, the insurer must ensure they do not unreasonably delay or withhold the payment of benefits. The insurance provider is also prohibited from putting its interest above that of the insured and must diligently seek evidence to support the insured’s claim.
Therefore, if an insurance company only seeks evidence that supports the denial, such action violates the implied covenant of good faith. Note that a breach of the implied covenant of good faith and fair dealing does not require malicious or immoral conduct from the insurance company. Similarly, negligent conduct alone does not amount to a breach of the implied covenant.
When an insurance company breaches the implied covenant of good faith and fair dealing, the breach is often simply referred to as “insurance bad faith.”
So, how does one establish the breach of the covenant of good faith and fair dealing? You must prove there is no reasonable basis for the insurance company’s decision or failure to decide on time. Also, you must establish that there is no ‘genuine dispute’ over your right to benefits under the facts and applicable law.
However, proving the above is quite complex, as several federal and state laws apply to insurance claims.
Thankfully, you do not have to fight the insurance company alone, as our bad faith insurance lawyers can help. Call 818-886-2525 to find out how.
Why is Insurance Bad Faith Litigation Important?
When an insurance company acts in bad faith and denies your claim, you will lose the benefits due to you. This is quite unfortunate as insurance claims are filed when there is a need. So, not getting paid benefits means looking for other means to handle the necessity or spending out-of-pocket.
You can appeal a claim denial, which might be successful or unsuccessful. A successful appeal means you will get the benefits owed to you. But it does not compensate you for the damages and sufferings caused by the delay and aggravation. You will also not receive compensation for the costs of a wrongful claim denial.
An insurance company that acts in bad faith must pay the full benefits specified under that policy.
This is why our bad faith insurance attorneys at Kantor and Kantor LLP advise those whose benefits claim gets denied to file a lawsuit. A bad faith insurance litigation offers you better compensation than an administrative appeal. In a bad faith lawsuit, you can recover one or more of the following:
- Payment of attorney’s fees.
- Emotional distress damages.
- Consequential damages, e.g., costs incurred to prevent further damage or to deal with the absence of expected insurance benefits.
- Punitive damages if the court deems the insurer’s actions as oppressive or malicious.
Again, most insurance claims denials breach the implied covenant of good faith and fair dealing. However, before you can recover any benefits for a breach of the covenant of good faith, you must first establish to the satisfaction of the judge or jury that the insurer breached the express terms of the insurance contract.
California Bad Faith Insurance Law
In California, policyholders benefit from the protections outlined in the Unfair Insurance Practices Act, also called the California Insurance Code INS § 790.03. This law explains unfair and deceptive behaviors by insurance firms and mandates that they refrain from engaging in actions including:
- Misrepresenting important information to claimants
- Neglecting to establish reasonable investigation protocols
- Failing to sincerely try to expedite just and equitable settlements of claims
- Needlessly prolonging the investigation or payout process for claims
- Advising claimants against seeking legal counsel.
Bad Faith Tactics Used by Insurance Companies
Insurance companies are profit-driven entities, and, unfortunately, some may resort to bad faith tactics to protect their bottom line at the expense of policyholders. At Kantor & Kantor, we have seen firsthand the tactics insurance companies employ to deny, delay, or underpay valid claims.
1. Delayed, Improper, or Absent Investigation
Insurance companies are obligated to promptly and thoroughly investigate claims made by their policyholders. However, bad faith may arise when an insurer fails to conduct a proper investigation or unreasonably delays the process. This could involve:
- Ignoring crucial evidence related to the claim
- Failing to interview witnesses or obtain necessary documentation
- Disregarding medical reports or expert opinions relevant to the claim
- Dragging out the investigation process without valid reasons.
2. Denial Based on Incomplete or Inaccurate Justification
A hallmark of bad faith is when an insurance company denies a legitimate claim without providing adequate justification or reasoning. Examples of this include:
- Rejecting a claim without providing a clear explanation or citing ambiguous policy language
- Denying benefits based on incorrect interpretations of policy terms
- Using biased or misleading information to support the denial of a claim
- Failing to communicate the specific reasons for denial to the policyholder.
3. Underpayment of Claims
Another tactic used by insurers engaging in bad faith is underpaying valid claims, often in an attempt to minimize their financial obligations. This may involve:
- Offering a settlement amount far below the actual value of the claim
- Disregarding the full extent of damages suffered by the policyholder
- Employing tactics to undervalue medical treatments, property damage, or other losses
- Delaying payment of the claim in the hope that the policyholder will accept a lower settlement out of desperation.
4. Other Unreasonable Conduct by the Insurer
Beyond outright denial of valid claims, insurers can breach their duty of good faith and fair dealing through various forms of unreasonable conduct, including:
- Intentionally prolonging the claim process without valid reasons, causing undue financial strain on the policyholder
- Providing false information or misleading the policyholder regarding benefits or the claims process
- Attempting to dissuade or obstruct the policyholder from pursuing legal action against the insurer.
Any such behavior that demonstrates a lack of honesty, fairness, or diligence on the insurer’s part may constitute bad faith.
Insurance Bad Faith FAQs
If you did all you had to and your insurance company unjustly denied your claim, you will likely have many questions. When you visit our law office, our bad-faith insurance lawyers will answer all your inquiries. However, below are some frequently asked questions about bad-faith insurance.
What is Bad Faith Insurance?
Bad faith occurs when an insurance company unjustly or maliciously refuses to pay benefits. Insurance bad faith also involves an insurer failing to investigate a claim properly or do so within a reasonable period.
How Can I Know If My Insurance Company Denied My Claim in Bad Faith?
Insurance companies can deny claims on justifiable and reasonable grounds. Therefore, the insurer acts in bad faith if they reject your claim unreasonably. They also act in bad faith if they place their interest above yours or make unreasonable demands to pay benefits.
Should I File a Lawsuit After a Bad Faith Denial?
Yes. Filing a lawsuit after a bad faith denial allows you to ask for additional compensation that an administrative appeal does not provide. You can get compensated for emotional damages, associated costs, and attorney fees.
Can I Pursue a Bad Faith Claim Under ERISA?
ERISA protects workers’ rights under an employment-group insurance plan for specific coverages. However, it does not protect workers against bad-faith insurance. As a result, you cannot file a bad faith claim under ERISA. Also, if you appeal a denial, you only get the benefits covered by the policy.
How Kantor and Kantor LLP Can Help
At Kantor and Kantor LLP, we help victims of insurance bad faith file the claims necessary to prove they deserve the previously denied benefits. Our experienced insurance bad faith lawyers fight for clients by:
- Evaluating their rights based on their insurance policy.
- Determining whether they have a viable case against an insurance company.
- Determining whether state bad faith laws or ERISA applies to the case.
- Identifying and organizing documentation pertinent to the case.
- Identifying the errors, intentional or otherwise, the insurance company made when denying claim.
- Pursuing benefits and compensation based on the applicable laws.
Our bad faith insurance attorneys in California understand these issues and can help you realize the benefits you bargained for when you purchased the insurance policy.
Long-Term Disability (LTD) Bad Faith
Long-term disability (LTD) insurance provides financial protection to individuals who are unable to work due to a disabling illness or injury. Unfortunately, insurance companies sometimes engage in bad faith practices when handling LTD claims, such as wrongfully denying or terminating benefits, delaying claim processing, or offering unreasonably low settlements.
How Our Attorneys Can Help
- Thorough Evaluation: We will carefully review your LTD policy and the circumstances surrounding your claim to determine if bad faith has occurred.
- Appeals: If your claim has been denied or benefits have been terminated, we will guide you through the appeals process and work to overturn the decision.
- Litigation: If necessary, we will not hesitate to take your case to court to pursue the compensation you deserve.
- Maximizing Benefits: We will work to ensure you receive the full benefits you are entitled to under your LTD policy.
Long-Term Care (LTC) Bad Faith
Long-term care (LTC) insurance covers the costs of assisted living, nursing home care, or in-home care for people who are unable to perform certain activities of daily living due to illness, injury, or aging. However, LTC insurers may engage in bad faith practices by denying valid claims, delaying claim processing, or offering inadequate benefits.
How Our Attorneys Can Help
- Claim Evaluation: We will thoroughly review your LTC policy and assess the circumstances of your claim to determine if bad faith has occurred.
- Appeals: If your LTC claim has been denied or benefits have been delayed, we will assist you in appealing the decision and advocate for your rights.
- Litigation: If a fair resolution cannot be reached without litigation, we will take your case to court and fight for your rights. Our skilled negotiators will work to reach a fair settlement with the insurance company to ensure you receive the maximum benefits you are entitled to. If not, we will take your case to trial.
Life Insurance Bad Faith
Life insurance provides financial protection to beneficiaries if the policyholder dies. However, life insurance companies may engage in bad faith practices by denying valid claims, delaying claim processing, or offering inadequate benefits to beneficiaries.
How Our Attorneys Can Help
- Claim Investigation: We will thoroughly investigate the circumstances surrounding the denial or delay of your life insurance claim to determine if bad faith has occurred.
- Appeals: If your life insurance claim has been denied, we will guide you through the appeals process and fight to overturn the decision.
- Litigation: We will not hesitate to take your case to court and advocate for your rights.
- Maximizing Benefits: We will work diligently to ensure that you receive the full benefits you are entitled to under the terms of the life insurance policy.
Take Advantage of Our 20+ Years of Experience
At Kantor and Kantor LLP, we have a proven track record of successfully challenging insurance companies. If you think your insurance company improperly denied your benefits, breaching their duty of good faith and fair dealing, we can help. Contact us today at 818-886-2525 to schedule a free consultation with our California bad faith insurance attorneys.
Attorney Glenn R. Kantor
Glenn Kantor is a founding partner of Kantor & Kantor LLP. As a young attorney, Glenn saw the injustice of wrongful insurance denials and created a law firm to represent individuals seeking to obtain their rightful benefits. Glenn is committed to ensure that clients receive the benefits they are entitled to under their insurance policies or group health plans. [Attorney Bio]