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.
California residents may be interested to learn that in June, a former insurance agent received a sentence of three years of formal probation with time served. The agent, a 31-year-old man, is also required to pay restitution after submitting a plea of guilty to a single felony count of insurance fraud for misappropriating funds from his employer. According to the terms of his plea deal, the man is required to pay back $4,389 to his victim.
A California security company owner has come under scrutiny for underreporting his payroll expenses in an attempt to lower workers compensation costs. Accused of cheating his insurer of $3.2 million, a San Jose business owner will face workers compensation insurance fraud charges.
Patient brokering is a practice that involves recruiting those who have substance abuse issues and referring them to rehab facilities. This is seen as a predatory practice that can lead to the death of patients as well as insurance fraud. However, proposed legislation in the California Senate would end the practice in that state. It would require that recovery programs that refer patients to be licensed and to only send them to facilities that meet certain standards.
In modern-day America, having insurance isn't merely a luxury. It's often essential. And certain types of insurance, such as auto insurance, are legally required here in California.