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Consumer Protection > Bad Faith Claims
Insurance bad faith occurs when an insurer unreasonably acts or fails to act, without proper cause, in a way that deprives its insured of benefits under an insurance policy. Examples may include unreasonably denying a covered claim, delaying payment, or failing to investigate fairly. A denial, delay, or disagreement about payment does not automatically establish bad faith.
California insurance policies include an implied obligation of good faith and fair dealing. Insurers must give their policyholders’ interests at least as much consideration as their own. When evaluating a claim, an insurer must conduct a fair investigation rather than disregard relevant information supporting coverage.
An insurer may dispute coverage or the amount owed on reasonable grounds without acting in bad faith, even if its decision is later found incorrect. However, a genuine dispute does not excuse an inadequate or unfair investigation. The policy language, available evidence, reasons for the decision, and resulting harm all matter.
A shared claims-handling policy may warrant investigation into whether multiple policyholders experienced the same misconduct. Depending on the facts, claims may be evaluated for individual litigation, coordinated proceedings, or a potential class action. A common insurer or similar denial letters alone do not establish that class treatment is appropriate.
Keep your policy and endorsements, claim submissions, denial letters, payment explanations, inspection reports, photographs, estimates, and relevant correspondence. A timeline of requests, responses, and payments can help explain how the insurer handled your claim. Preserve records of financial losses or other harm connected to the disputed handling.
Legal sources: California Civil Jury Instructions CACI No. 2330: Good Faith and Fair Dealing, CACI No. 2331: Unreasonable Failure or Delay in Payment, and CACI No. 2332: Failure to Properly Investigate a Claim.
Concerned that your insurer unfairly denied, delayed, or underpaid your claim? Matern Law Group can review your circumstances and explain your legal options.
Insurance companies have a legal duty to treat policyholders fairly and comply with California law. When insurers adopt practices that improperly deny, reduce, or terminate coverage, they may harm thousands of policyholders at once.
In these situations, legal claims may be brought on behalf of many affected policyholders through class actions or coordinated mass litigation.
Our attorneys investigate whether insurance companies are engaging in systemic bad faith practices that violate California insurance laws and consumer protection statutes.
Insurance bad faith occurs when an insurer fails to act honestly and fairly toward policyholders.
Under California law, insurers must:
When insurers violate these duties, particularly through company-wide policies, they may face liability for bad faith and unfair business practices.
Most insurance disputes involve individual claims. However, sometimes insurers adopt uniform policies or practices that affect large groups of policyholders.
Examples include:
When the same conduct affects thousands of consumers, the law allows those policyholders to pursue claims together through class actions or coordinated litigation.
These cases can expose unlawful insurance practices and recover compensation for large groups of affected policyholders.
In addition to insurance bad faith claims, insurers may also be liable under California’s Unfair Competition Law (Business & Professions Code §17200).
This law prohibits businesses from engaging in unlawful, unfair, or deceptive practices.
Insurance companies that adopt policies that violate insurance regulations or statutory protections may be held accountable under these laws.
If you believe your insurance company acted unfairly, particularly if the issue affects other policyholders, legal action may be possible.
Our attorneys investigate whether insurers are engaging in practices that violate California law and harm large numbers of consumers.
Contact us today for a confidential case review.
We offer a no-obligation, free consultation. Contact us now to evaluate your claim.
Speak with a California bad faith insurance attorney today.
Protect Your Rights. Demand Fair Treatment. Hold Your Insurance Company Accountable.
You deserve clear answers about your rights. Contact Matern Law Group to discuss your situation and explore your legal options.
Our Practices are Guided by Integrity. We’ll protect what you deserve.
We work tirelessly and fight tenaciously to hold rights abusers accountable.
If you’ve experienced a distressing incident related to an issue like this, call us for a free case evaluation.
Legal cases can be lengthy, complicated, and confusing, but you don’t have to take on the system all by yourself. If you believe someone has violated your individual rights, or the rights of a large group of people in your community, we can help you find the right course of action.
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