California law imposes an implied duty of good faith and fair dealing on every insurance policy, based on fundamental principles of fairness. Everyone owes a duty of care to others and, when that breach occurs, the at-fault party must be held accountable for any damage they’ve caused.
This duty of good faith extends beyond just people. Businesses, companies, hospitals, educational institutions, and other organizations must operate in a duty of good faith as well. Insurers are required to act in a fair and reasonable manner as well. This duty of care prohibits them from acting or failing to act in any way that would deprive policyholders of their owed insurance benefits.
When an insurer fails to act in accordance with the terms and conditions laid out in a contract, a breach of contract has occurred. This is a different situation than a bad faith insurance claim, but both incidents should be taken seriously. If you’ve been a victim of an insurance breach of contract or a bad faith insurance claim, you need the help of experienced legal counsel as soon as possible.
What Is A Bad Faith Insurance Claim?
Bad faith occurs when an insurance company fails to fulfill the obligation it has made to its clients, and works with them in an unfair or unlawful way. Sometimes, an insurance company will refuse to pay a policyholder’s claim, even when the claim is legitimate and the policyholder does in fact have a right to that claim.
If an insurance company acts unreasonable or without proper cause, this is often considered operating in bad faith. It’s a much more broad term and concept than a breach of contract, which denotes that a specific term of your contract was not upheld.
How Is A Breach Of Contract Of Bad Faith Insurance Claim Differentiated In Court?
Both breaches of contracts and bad faith insurance claims deal with similar kinds of behavior. Both relate to insurance companies who have failed to fulfill their obligations to their policy holding customers. But a key differentiating factor between the two is determining where the insurance company’s obligation comes from.
Let’s use car insurance as an example. For the most part, the majority of an insurer’s legal obligations to their policyholders come from insurance policies and any riders that are added to the original policy. The insurance company’s duties, as laid out in the insurance policy, are governed by the principles of California state contract law. This set of laws is used as a basis to enforce legal contracts, and is used to differentiate a breach of contract from a bad faith insurance claim.
Bad faith insurance claims, on the other hand, are rooted in the duty of good faith that’s placed upon every resident of California. State courts, under common law and other statutory requirements, require insurance companies to uphold a covenant of fair dealing with every policyholder. Common law and statutory requirements govern bad faith insurance dealings, and lay out the framework for how these findings are defined and penalized.
Do I Need A Lawyer If Breach Of Contract or Bad Faith Has Occurred?
Any time you’ve been a victim of someone’s negligence, recklessness, or bad faith, you have the right to contact a lawyer about what you have experienced. It can seem tough to stand up against a negligent insurance company, especially since they have their own lawyers and the funds to defend themselves aggressively. That’s why it’s imperative that you contact experienced legal counsel as soon as you’ve been wronged by your insurance company.
With the help of a legal representative such as a lawyer, you can fight back against these big insurance companies and have your side of the story told in court. Your attorney will defend you against the insurer, and will stop at nothing to ensure you get the justice and compensation that’s rightfully owed to you.
Contact McKennon Law Group PC If You’ve Been A Victim Of Bad Faith Insurance Or A Breach Of Contract
McKennon Law Group PC offers a free, no-risk case evaluation to any California resident who has been victimized by their insurance company. The importance of working with smart legal counsel dring this time cannot be overstated. WIthout the help of an attorney, it can feel impossible to have your side of the story heard and to stand up against these insurance companies.
Your initial case consultation with McKennon Law Group PC is free of charge and comes at no obligation to you. The sooner you call, the sooner you get advice about standing up to your insurance company.