When you have a California insurance policy in place, it may give you peace of mind that you are not going to face financial failure in the event of a serious accident or injury. Yet, insurance companies are for-profit entities, and they generate money by collecting insurance premiums, rather than paying out claims. Sometimes, an insurance company’s efforts cross a line and happen in “bad faith.” However, your insurers have a legal obligation to act in “good faith,” and failing to do so may cost them.
According to United Policyholders, your insurer has a legal and ethical obligation to consider your needs when making decisions about covering your claim. It also has to be upfront with you from the start about your policy and the rights that come with it. If your insurer engages in or does any of the following, it may be acting in bad faith.
Lies to you
Your insurer must be truthful every step of the way when working with you. Your insurance representative must remain honest, regardless of whether communicating with you by phone, by mail or email, or what have you.
Discriminates against you
Your insurer also may not discriminate against you in any manner while reviewing or processing your claim. This includes discriminating against you on the basis of race, gender, sexual preference, disability and so on.
Fails to consider all evidence
Your insurer also has an obligation to consider all facts of your claim and conduct a reasonable investigation to make sure they are true.
If your insurance company turns its back on you and fails to act in good faith, you may be able to open a case against the company that insures you.