When Your Insurance Company Refuses to Honor Its Promises

Insurance is supposed to be a safety net. You pay your premiums month after month with the understanding that when something goes wrong—an accident, an injury, a fire, a theft—your insurance company will be there to cover your losses. But for too many policyholders in Los Angeles, filing a claim is when they discover that their insurer is more interested in protecting its bottom line than in honoring its commitments. When an insurance company unreasonably delays, denies, or underpays a valid claim, it is acting in bad faith—and California law provides powerful remedies.

What Constitutes Insurance Bad Faith

Under California Insurance Code Section 790.03(h), insurers are prohibited from engaging in unfair claims settlement practices. Bad faith conduct includes denying a claim without conducting a thorough investigation, misrepresenting policy language to avoid payment, failing to respond to communications or process claims promptly, offering settlements that are unreasonably low, refusing to pay claims where liability is clear, threatening policyholders or creating unnecessary obstacles, and failing to provide a clear explanation for a claim denial.

Every insurance policy in California carries an implied covenant of good faith and fair dealing. When an insurer violates that covenant, the policyholder can sue for bad faith—a claim that goes beyond the original policy benefits and can include substantial additional damages.

Damages in Bad Faith Cases

Bad faith claims can result in recovery of the full policy benefits owed, consequential damages caused by the insurer’s conduct, emotional distress, attorney’s fees and costs, and punitive damages under California Civil Code Section 3294 when the insurer’s conduct was willful, oppressive, or fraudulent. Punitive damages in insurance bad faith cases can be substantial—sometimes many multiples of the original claim value—and serve as a deterrent against future misconduct.

If your insurance company is treating you unfairly, you do not have to accept it. Beverly Wilshire Law APC can fight for the full compensation you are owed—plus the additional damages that bad faith conduct warrants. Call (310) 424-5566 or email info@bevwilshire.com for a free consultation—we’re here to guide you in the right direction.