Insurance is all but mandatory in certain instances, such as if you wish to drive a car in California or if you carry a mortgage on your home, and is seen as a necessity for things like health. And while it's certainly true that as much as most people would prefer not to have to pay for insurance, they absolutely never want to have to access the benefits of insurance by needing to file a claim. But when they do, they want their insurance company to be there for them. Unfortunately, that is not always the case.
A California court of appeals has upheld a judgment against a major insurance company for dealing with one of its insureds in bad faith. In August 2008, a 24-year-old man was in a serious car accident on a California highway. He was traveling at around 45 or 50 miles per hour when he crashed head-on with a vehicle that had crossed into his lane traveling approximately the same speed. The at-fault driver, who had crossed into the wrong lane, was killed in the crash.
Prosecutors in California say that a former licensed insurance agent stole more than $100,000 from small business owners and general contractors by selling them bogus workers' compensation policies. The 31-year-old man faces a raft of felony counts, including insurance fraud, forgery and grand theft. Prosecutors say the man used the money to cover gambling debts and buy luxury items such as designer clothing and sporting equipment. He was released from custody after posting bail in the amount of $100,000.
A former California lawyer was sentenced on Jan. 11 to four years in prison after being convicted of insurance fraud and felony elder fiscal abuse. The 83-year-old man's conviction came over three years after allegations were first raised regarding his failure to pay for long-term care for a 92-year-old mother and her disabled dependent 63-year-old son. The man had served as mother and son's fiscal and medical power of attorney.
Insurance companies in California typically have several advantages over policyholders because of their significant resources and negotiating strength. This is why many states have laws requiring insurance providers to act in good faith when dealing with their customers and handling claims. If an insurer acted in "bad faith," a policyholder might be able to pursue legal action. There are several elements that constitute what's termed bad faith insurance.
Regulators in California have taken over an insurance company that was unable to pay claims resulting from massive wildfires that destroyed more than 13,000 homes throughout the state. As a result, homeowner claims will now be paid by the California Insurance Guarantee Association. The largest fire in the state, which started on Nov. 8, almost completely destroyed the city of Paradise and many of the surrounding areas. There were also many losses in Ventura and Los Angeles County.
Many people are great believers in insurance and purchase a variety of policies to help ensure total protection. Others begrudgingly take on only the bare minimum as required by law or for some specific contractual agreement. In any case, when a claim needs to be filed, the insured fully expects the company to stand up and pay on the claim. However, many California residents have been dismayed to find out that insurance claims are often denied.
A jury in Riverside County returned a guilty verdict on charges of insurance fraud and perjury against an 86-year-old doctor on Oct. 4. He could potentially receive 18 years in a state correctional facility. After paying $30,000 in bail, the doctor secured his release while awaiting his sentencing hearing.
You selected an insurance policy and paid premiums to obtain financial protection in the event of an accident, theft, fire or other problem. If a loss covered by the insurance contract occurs, you naturally expect to collect on a claim or at least appeal a denial of coverage. The rescission of an insurance policy, however, could not only surprise you but undermine your protection from loss. When a Florida insurance company rescinds your policy, it acts as if the contract never existed.
Hundreds of complaints from addiction treatment providers have prompted the California Department of Insurance to serve HealthNet with an Order to Show Cause and Notice of Noncompliance. Court filings indicate that the insurance company failed to meet the terms of its contracts with providers. Accusations from providers detailed an outright denial of legitimate claims or substantial underpayment.