Insurance Bad Faith

Dedicated Los Angeles Attorneys Committed to Fighting Back Against Insurance Companies That Wrongfully Deny Claims

As a homeowner, you rely on your insurance policy to provide financial security during life’s most challenging moments. When an insurer delays, denies or underpays a valid claim, it can leave you feeling abandoned and overwhelmed, not to mention hurting financially. At the Nourmand Law Firm, APC, we understand how devastating these tactics can be. Our experienced Los Angeles insurance bad faith lawyers are committed to holding insurance companies accountable and helping policyholders recover the compensation they are rightfully owed. Let us fight for your rights when your insurer refuses to.

What Is Insurance Bad Faith?

Insurance bad faith occurs when an insurance company unreasonably denies, delays, or underpays a valid claim. Insurers have a legal duty to act in good faith and fair dealing with their policyholders, meaning they must handle claims promptly, transparently, and with reasonable justification. When an insurer prioritizes its own profits over its obligations to policyholders, it can cause significant hardship for those who rely on their coverage, especially during the difficult times when these claims tend to arise.

Bad faith can occur in a variety of ways. Some of the most common types of insurance bad faith include:

• Denial Without Justification: Refusing to pay for valid claims with no explanation or providing false reasons for denial.
• Delays in Processing: Taking excessive time to investigate or settle a claim without a valid reason, leaving policyholders in limbo.
• Lowball Settlement Offers: Offering significantly less than the value of the claim, knowing that policyholders may feel pressured to accept.
• Misrepresentation of Policy Terms: Providing inaccurate or misleading information about what the policy covers to avoid paying out.
• Failure to Communicate: Ignoring calls, emails, or requests for updates on the status of the claim.

Examples of Bad Faith in Homeowner’s Insurance Policies

Homeowner’s insurance policies are designed to protect against unforeseen disasters, including fire, storm damage, theft, and vandalism. However, bad faith practices can derail the recovery process and leave homeowners struggling. Below are some real-world scenarios where bad faith might occur:

• Storm Damage Denials: After a hurricane or severe storm, a homeowner files a claim for roof damage. Despite the policy explicitly covering storm-related damage, the insurer denies the claim, citing “pre-existing conditions” without evidence.
• Unreasonable Delays in Approving Repairs: A fire damages a home, and the homeowner submits a claim immediately. The insurer drags its feet for months, preventing the homeowner from beginning repairs and forcing the family to live in temporary housing.
• Lowballing Repair Costs: An insurer approves a claim for water damage but offers a settlement that is far below the actual cost of repairs, leaving the homeowner to cover the difference out of pocket.
• Disputing the Cause of Damage: After theft, a homeowner files a claim for stolen valuables. The insurer disputes the claim, arguing that insufficient evidence exists to prove the theft occurred despite a police report and inventory documentation.

Why Insurance Companies Act in Bad Faith

Unfortunately, some insurance companies engage in bad faith practices to protect their bottom line. Denying or delaying claims, underpaying settlements, or discouraging claimants can reduce payouts and increase profits. This is particularly common in cases where the insurer believes the policyholder may lack the resources to challenge the denial or delay.

While this behavior is unethical and potentially illegal, many policyholders feel powerless to fight back. An experienced Los Angeles insurance bad faith lawyer can help level the playing field, ensuring that insurers are held accountable for their actions.

What Damages Are Available in a California Bad Faith Claim?

Policyholders who successfully prove bad faith may recover damages that extend beyond the original policy amount. Compensation typically falls into the following categories:

• Contractual Damages: This includes the value of the claim under the terms of the insurance policy. For example, if your homeowner’s policy covered $50,000 in fire damage and your claim was wrongfully denied, you may recover that amount in full.
• Consequential Damages: These are costs you incurred as a direct result of the insurer’s bad faith. This might include paying for temporary housing while waiting for repairs or replacing stolen property out of pocket.
• Emotional Distress: Insurance bad faith can be an emotionally taxing experience. Prolonged delays, denied claims, or insufficient settlements can lead to anxiety and frustration, which courts may recognize as compensable damages.
• Punitive Damages: In cases where the insurer’s conduct was particularly egregious, punitive damages may be awarded. These are intended to punish the insurer and deter similar behavior in the future.

Steps to Take If You Suspect Bad Faith

If you believe your insurance company has acted in bad faith, taking the right steps can strengthen your case:

1. Document Everything: Keep records of all correspondence with the insurer, including emails, letters, and phone calls. Save any paperwork related to your claim, such as repair estimates or receipts.
2. Request Written Explanations: If your claim is denied, request a detailed explanation in writing. This can reveal whether the denial is based on a legitimate reason or an unjustified excuse.
3. Avoid Accepting Low Offers: Do not feel pressured to accept a lowball settlement. Consult a professional to evaluate the true value of your claim.
4. Consult a Lawyer: Contacting a Los Angeles insurance bad faith lawyer is one of the most effective ways to protect your rights. An attorney can review your case, gather evidence, and advocate for the compensation you deserve.

Together, We Can Hold Your Insurance Company Responsible for Its Bad-Faith Practices

No one should have to fight their insurance company to receive the benefits they are owed. If your claim has been denied, delayed, or underpaid, it is essential to seek legal guidance. A Los Angeles insurance bad faith lawyer at the Nourmand Law Firm, APC, can help you understand your options and take the necessary steps to protect your rights.

Call today to schedule a free consultation and learn how you can challenge bad faith practices effectively. With the right support, you can demand the justice and compensation you deserve. You can reach us over the phone at 800-700-9243 or through our secure online contact form.