Archive for the ‘ Insurance Bad Faith’ Category

Information About Recent Bad Faith Insurance Cases in California

Monday, June 21st, 2010

When we purchase insurance polices, we are buying faith in the company that wrote and issued the policy. Even though the chances of needing this insurance to pay a claim are remote, we send them money anyway so that we are somewhat protected if something should happen to our car, our house, our health or another important facet of our lives. However, when insurance companies fail to honor the contracts they write, California policyholders have no recourse but to contact an experienced California insurance bad faith lawyer to remind the companies of their contractual obligations. If you believe that your insurance company is acting in bad faith, here are some California court decisions that your Southern California insurance bad faith attorney can explain in greater detail:

  • Glenfed Development Corp. v. Superior Court, 53 Cal. App. 4th 1113 (1997) This decision requires insurance companies to provide copies of their claims manuals in the course of pre-trial discovery.
  • Pfizer, Inc. v. Superior Court of Orange County, 59 Cal. App. 4th 480 (1997) This decision created a precedent that insurance companies can be compelled to disclose how they treated other policyholders with similar claims.
  • Lipton v. Superior Court, 48 Cal. App. 4th 1599 (1996) In this case, the court ruled that reserves and reinsurance are subject to discovery in a trial.
  • Crime/Fraud Exception to Attorney-Client Privilege — State Farm Fire & Casualty Co. v. Superior Court (Taylor), 54 Cal. App. 4th 625 (1997) (order published 12/1/97) In this case, State Farm intentionally spoiled evidence that would have supported a customer’s bad faith insurance claim. State Farm also engaged in other fraudulent practices including forgery to avoid paying valid earthquake claims.

Long Beach insurance bad faith lawyer Samer Habbas would like to remind his readers that insurance companies are for-profit enterprises and paying claims erodes profits. Insurance companies are in the litigation business. It is an important component of their business model. Some will employ many different tactics to avoid paying a claim. If you feel that you have a valid claim and your insurance is acting in bad faith, contact California insurance bad faith attorney Samer Habbas today by calling 888.848.5084 to schedule a free consultation.

Resource link: California recent developments

A Brief Explanation of Insurance Bad Faith

Friday, May 28th, 2010

When dealing with any type of insurance company, it’s helpful to remember that these are for-profit organizations. Like any for-profit organization, insurance companies loathe to part with their profits by paying claims. The majority of insurance companies pay claims filed by clients in a timely manner as they understand their responsibilities to their clients, but some deliberately do not and can be found to be acting in bad faith.

A big part of their responsibilities is determined by whether a client’s claim is considered a “first party” claim or a “third party” claim. When a first party claim is filed, they are required to investigate any damage to the item that they have insured, decide whether the damage is covered by their policy, and pay their client fair market value for the damage. If the insurance company does not investigate or evaluate properly or fails to acknowledge that a claim has been filed, it can be determined that they are acting in bad faith.

For third party claims, they have two responsibilities to their clients and must be fulfill both of these in good faith.

  • They have a duty to defend a claim or lawsuit even if a part or most of the lawsuit is not part of the insurance policy coverage. Unless an insurance policy is specifically structured so that the costs of defense are counted against policy limits, they must cover all the defense costs no matter what the coverage limit of the policy may be.
  • They have a responsibility to pay for judgments against the policyholder up to the coverage limit, but this is only when the judgment is for an omission or covered act. The legal term for this is indemnification.

If the insurance company improperly refuses to defend a lawsuit or refuses to pay a judgment or settlement of a covered lawsuit, they can be found to be acting in bad faith.

As you might guess, these are very simplified examples. If you believe that your insurance company is acting in bad faith, you should speak with an experienced Los Angeles insurance bad faith lawyer such as Samer Habbas. Southern California insurance bad faith attorneys like Mr. Habbas can explain the laws that apply to your situation and determine whether you have a case. If you believe that you have a valid claim that your insurance company is failing to honor, call 888.848.5084 today to schedule a free consultation with California insurance bad faith lawyer Samer Habbas.

Resource link: A Brief Explanation of Insurance Bad Faith

What is a Bad Faith Insurance Claim?

Tuesday, October 13th, 2009

As consumers, we all pay exorbitant premiums to insurance companies in good faith, expecting in a return of good faith that the insurance company will pay any claims submitted against your insurance policy. However, insurance companies are in business to make money, not to pay claims. Paying claims affects profitability.

Enter “bad faith.”

When you purchase insurance coverage, you enter into a contract with the insurance company. You pay the insurance company for future protection through premiums and the insurance company pays claims submitted against your policy. A simple definition of “bad faith” in the legal world relative to the situation at hand is a breach of contract, a failure to act in good faith.

Examples of bad faith acts by insurance companies are:

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