What is an Insurance Bad Faith Claim? San Diego Lawyer Explains

Insurance bad faith is where an insurance company interprets a policy in an unreasonable manner such that their motivation is to deny coverage and those certain circumstances the insurance company can be held liable for a variety of additional damages other than just paying out on your claim. In California, an Insurance Company can be held liable for punitive damages. Punitive damages in the insurance context would be awarded if the judge or jury, depending on the case, felt that it was necessary to punish the insurance company for the tactics that they undertook. It can be implementing policies to where there's just not enough attention being paid to particular claims, it can be if there is an initial mistake made by an insurance adjuster and they failed to correct that misinterpretation when they should have caught it; there's things that the insurance company can do with what are called reserves, if your claim is made based on any type of policy, the insurance company should have sufficient reserves in order to pay out on that claim, and if it doesn't, then that indicates that it never was going to in the first place, and that can be an element of bad faith. There's just a variety of factors that can go into a bad faith determination. For more information about business law in San Diego, go to PurdyBailey.com.