UNFAIR TRADE PRACTICES IN THE INSURANCE BUSINESS
On behalf of Girard Bengali, APC posted on Friday, April 12, 2019.
A previous post on this blog discussed the elements of a claim of bad faith. That post mentioned that a bad faith claim can help homeowners in the Los Angeles area, as well as those who own houses as investment property, fight back against an insurance company that, for whatever reason, is not being fair or reasonable in handling the owner’s loss or damage to their property.
Otherwise, an insurance company may have every incentive to delay paying a claim, to make unnecessary requests of an insured before agreeing to pay, or even to outright deny a legitimate claim on a technicality or, worse, simply because the company feels it can use its superior resources to force an insured to take a lowball offer.
While not exactly the same as a traditional bad faith case, those property owners who feel that they are being jerked around after making a claim also should be aware that California law spells out certain specific behaviors that insurance companies must not engage in.
For example, companies may not have policies, or even implied policies, that involve delaying decisions on claims without cause. Likewise, insurance companies may not have a practice of offering lowball settlements in the hope that the insured will have to spend time and money taking the company to court.
Insurers must have clear standards as to how they will efficiently and correctly resolve claims, and they must also even acknowledge and respond to questions an insured may have about his or her property claim.
Again, these rules, along with related regulations, are ordinarily enforced by an administrative agency. However, a violation of them can be valuable evidence in a property owner’s quest to hold an insurance company accountable.
