What are some of the characteristics necessary to build a good California bad faith insurance case?
- One of the first questions to be asked: Is there coverage under the insurance policy?
Many times this is not clear. It takes a careful analysis of the terms of the insurance policy and an understanding of California case law holdings regarding how certain policy language has been interpreted by the California courts. - Assuming that there is coverage, was timely notice of the claim given to the insurance company?
Notice of the insurance claim is critical. If the carrier is not given timely notice, the insurance carrier may not be obligated to pay the claim. However, timely notice may be an issue of fact that is not entirely clear. - Assuming that there is insurance coverage and timely notice was given, another fundamental question that must be determined is whether the claimant is an insured under the policy.
This is not always straightforward. If the claimant is a named insured, then it usually is not an issue. However, some insureds are not specifically named in the policy declarations, such as residents of a household in a homeowner’s insurance policy. The question then centers on whether the claimant is a resident.
In small business policies where the business is the only named insured, few California courts have held that the owner is also an insured. This is important because a business entity cannot obtain emotional distress damages. When purchasing business insurance policies, it is the best practice to request that the owners and the business entity each be separately named insureds. - An important issue is whether there is an “exclusion” in the insurance policy that applies.
There may be insurance coverage as determined in the coverage grant in the policy, but there also may be a specific exclusion that limits a specific type of loss. Then there may be an exception to a particular exclusion that applies and should be considered. - Were all conditions in the insurance policy met by the insured?
Giving timely notice is a condition. Did the insured take all reasonable steps to minimize the loss? Other conditions required by the insurance policy must be analyzed. - If there is insurance coverage, no applicable exclusions, if all conditions have been met and there is no dispute regarding coverage, did the insurance company pay the full amount of the claim?
Many times the insurance company commits bad faith by “low balling” the insured. For example in a damaged home claim made under a replacement cost policy, refusing to pay the amount necessary to repair the home to its pre-loss condition may be bad faith. The larger the disparity the more potential there is for bad faith. - What is the extent of your losses/damages?
The greater the out-of-pocket losses (also referred to as economic damages), the more value your case may have. - Has the time passed for filing suit in a California court of law?
Most California insurance policies have a limitations period of one year. But determining the time when the period expires is often difficult and requires further analysis of the facts. - Another question to be considered is where should the bad faith insurance lawsuit be filed?
Should the California bad faith insurance lawsuit be filed in Los Angeles County, Riverside County, San Bernardino County, Orange County, San Diego County, or some other County in California? Will the bad faith insurance case be removed to Federal District Court? Where the lawsuit is filed can be critical to the outcome of the bad faith insurance case.
The above are some of the questions that must be considered to determine if you have a “good” case for bad faith insurance litigation in California.
Each California bad faith insurance case is different and requires its own analysis. The analysis of a bad faith insurance case can be tricky and complicated.
To determine if you have a bad faith insurance case that is worth pursuing you should consult with bad faith insurance lawyers with in-depth knowledge and experience in California bad faith insurance litigation.
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Call (213) 842-8164 for help in determining if you have a “good” case for bad faith insurance litigation in California or email our bad faith insurance trial attorney.
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