What is Insurance Bad Faith and What Should You do if Your Claim is Denied?

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What is insurance bad faith for those of us who live in San Diego and Southern California?  Why would your own insurance company deny your valid claim after all the premiums you’ve paid?  The answer may be due to negligence on the part of the insured that is not covered by the policy.  Increasingly, the reason is becoming quite suspicious and may qualify as insurance bad faith under California and Federal law.

What is insurance bad faith and how do I know if I should be concerned?  Basically, insurance bad faith occurs when the insurance company refuses to provide the benefits promised in the insurance policy itself.  Why would they refuse to approve a valid claim?  The answer lies in the insurance company’s motivation: to reduce or eliminate the amounts paid for insured claims.  There are many claims denied each year across the United States and here in San Diego because the loss “was not part of what was covered by your insurance policy.”  The insured is usually pointed to legalese that is impossible to understand.  It is easy to feel like you are powerless and without options.  This simply isn’t true.  Your insurance company may be acting in bad faith and we can help you to hold them responsible and financially accountable.  Our experienced insurance coverage attorneys can review your policy and defend you against an unwarranted denial.

Your insurance company is required by law to make a “good faith effort” to settle your valid claim in a fair matter.  However, they often offer you far less than what the claim is actually worth or attempt to escape their responsibilities by issuing a “Reservation of Rights” letter.  Insurance insiders mockingly call the Reservation of Rights letter a “denial letter.”  Have you received a Reservation of Rights letter from your insurance company?  Red flags should go up immediately.

Most importantly, you may be entitled to your own independent attorney if you are a defendant in a lawsuit that involves insurance coverage.  In many cases where a lawsuit has been filed and the insured is a named defendant covered by an insurance policy, California law provides for your own Cumis Counsel or independent attorney and your insurance company has to pay these costs on your behalf.

Many clients have asked what is insurance bad faith and what should they do to protect themselves.  The answer starts with a free consultation at 858-535-1511.  Share what has happened in your case and learn about the options the Watkins Firm can provide to protect you from insurance bad faith and the denial of a valid claim.