Insurer Bad Faith in California

562 Words3 Pages
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...

More about Insurer Bad Faith in California

Open Document