Insurer Bad Faith in California
Too many people who have paid premiums to an insurance company for years get an unpleasant surprise when they file a claim under their policies: the insurer’s former friendliness and accommodating attitude give way to suspicion, avoidance and even threats. And it all happens at the very time that the loss which caused the claim is adding stress and anxiety to the insureds’ lives.
The “Good Faith” Duty of Insurers
California was a leader in recognizing this imbalance of power between insurance companies and their customers, and in rectifying it. Every insurance policy is “deemed” to include a provision that the insurer will act in good faith and deal fairly with the insured. If the insurance company violates that duty it commits the “tort” of bad faith.
That duty of good faith applies to all the insurer’s actions during the entire claims handling process, including its decision on whether the claim is covered and how much to pay on the claim.
The fact that insurers can’t act in bad faith provides insureds with some protection, as long as they are wi...
Illinois. Mercherle didn’t think it was fair that families and other farmers that lived in rural communities paid the same auto insurance rates as those that lived in Chicago. He wanted to establish an “honest insurance company that provided rates related to the risk” (State Farm, About Us). In 1922, after the company opened their doors, a new claim was made which established State Farm’s promise “to be there when the unexpected happens” (State Farm, About Us).
The process of choosing a health insurance provider should have been more consumer friendly. People
Jack’s case is an example of medical negligence. The physician that prescribed the prescription should have done a full physical and medical exam on the patient. Jack’s physician failed to ask if he was allergic to any medication. Before prescribing any medication one of the first questions should be what or if they are allergic to anything. Jack faced several health complications such as difficult breathing, turning red, and falling to the floor. He went into anaphylactic shock due to the fatal allergic reaction. The last encounter with Sulfa, Jack developed a rash due to the allergic reaction. Health professionals are required to undergo training
The tort of negligence is the failure to exercise the standard of care that a reasonable person would exercise in a similar circumstance. Negligent conduct may consist of either an act, or an omission to act when there is a duty to do so. Four elements are required to establish a prima facie case of negligence. The existence of a legal duty to exercise reasonable care, a failure to exercise reasonable care. Cause in fact of physical harm by the negligent conduct; physical harm in the form of actual damages and proximate cause. Which is showing that the harm is within the scope of liability.
Tort reformers believe that courts must reduce the ability of defendants’ liability in order to avoid economic decline. In the years to come, the proposals likely to generate the biggest dispute include malpractice and class-action reform, limits on noneconomic and punitive damages, and a legislative solution to asbestos legation (Rushmann, 2006). There are many lawsuits. But the frivolous lawsuits should not be taken seriously and not cost our courts and citizens time and/or money.
One of the biggest contributors to health care costs that I have seen during my time in the healthcare industry is insurance fraud. One example of such fraud came about two months ago. I was taking a phone call from a provider that was upset that one of their claims had denied even though all of their previous claims had been paid. In researching with a partner plan it was determined that the claim denied because this medical provid...
Rodwin, M. (1996). Consumer protection and managed care: issues, reform proposals, and trade-offs. Houston Law Review, 32(1319), 1319-1381
Another downfall to HMO coverage is selective-contracting. This is a process where hospitals deny treatment to patients because their...
Claimant fraud is very serious, but has more than its share of attention in the media, completely blowing the problem out of proportion. The Press Democrat found that, "While some insurance companies claim one out of three workers lie about their injuries, or 33%, the actual number of fraud cases sent to prosecutors is less than one out of one hundred, or less than 1%." In New York, for example, over $6 million in insurance fraud was documented, less...
Tort reform is very controversial issue. From the plaintiff’s perspective, tort reforms seems to take liability away from places such as insurance companies and hospitals which could at times leave the plaintiff without defense. From the defendant’s perspective, tort reform provides a defense from extremely large punitive damage awards. There seems to be no median between the two. Neither side will be satisfied. With the help of affiliations such as the American Tort Reform Association and Citizens Against Lawsuit Abuse, many businesses and corporations are working to change the current tort system to stop these high cash awards.
Given the difficulties in the present tort system, we often become victims of the failures of medicine as opposed to beneficiaries of its many successes. Physicians have lost in that they have changed, limited, or closed their practices after having spent the most vigorous years of their lives training for such work. Patients have lost in that the physicians of their choice, with whom they have developed trusting relationships, are no longer available to care for them. It is certain that the system requires sensible reform (p.525).
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
Rising health care costs have caused a national crisis, and all agree we must embrace reform. President Obama has initiated his national health care plan in the hopes of decreasing some of the inflated costs. When attempting to resolve this issue, one must always address the root of the problem. A large portion of these inflationary costs stem from malpractice lawsuits, and so begins the debate for tort reform: legislation which would cut the costs of health care by reducing the risk of civil litigation and exposure to fraudulent claims (“What”). However, the real factor at hand and the real cause of the industry’s high costs does not come solely from the cost incurred from these lawsuits, but from over-expenditures on the part of doctors, who over-test and over-analyze so as to safeguard themselves from the threat of malpractice lawsuits. Thus, large public support exists for tort reform. While the proposed legislation enacted through tort reform could cut the costs of health care and positively transform the industry, it is ultimately unconstitutional and could not withstand judicial scrutiny.
For the contrary the loading change (fee to cover the incurred administrative expenses) can be expensive. Also, the insurance sometime fails to meet demand providing limited protection, this insurance shortage can lead to ineffective insurance regulations. As well as, for consumer with minimum loss experience, their premium will be high, because their probability of loss is high.