How To Prove A California Bad Faith Insurance Claim

In California, a claim of Bad Faith Insurance is defined as:
Bad faith insurance occurs when an insurer attempts to renege on its obligations to its clients, either through refusal to pay a policyholder’s legitimate claim or investigate and process a policyholder’s claim within a reasonable period.
It simply means:
When an insurance company won’t lay a claim.
There are 5 elements of the claim:
- Element 1. The plaintiff suffered a loss covered under insurance policy issued by defendant. The plaintiff experienced a financial loss that should have been paid for by their insurance policy, which was provided by the defendant, but the defendant failed to honor the claim as required.
Facts that might support this element look like:
* The plaintiff experienced significant property damage due to a covered event, such as a fire, which is explicitly included in the insurance policy.
* The plaintiff submitted a claim to the defendant for the damages incurred, providing all necessary documentation as required by the policy.
* The defendant acknowledged receipt of the claim and confirmed that the damages fell within the coverage limits of the policy.
* The plaintiff incurred additional expenses related to temporary housing while repairs were being made, which are also covered under the policy.
* The defendant delayed processing the claim for an unreasonable period, causing further financial strain on the plaintiff. - Element 2. Plaintiff properly presented a claim to be compensated for the loss. The plaintiff clearly showed that they had a valid reason to seek payment from the insurance company for their losses, demonstrating that they followed the necessary steps to make their claim.
Facts that might support this element look like:
* The Plaintiff submitted a detailed claim form to the insurance company, outlining the specifics of the loss incurred.
* The Plaintiff provided all requested documentation, including photographs and repair estimates, to substantiate the claim.
* The Plaintiff followed up with the insurance adjuster multiple times to ensure the claim was being processed.
* The Plaintiff received written confirmation from the insurance company acknowledging receipt of the claim.
* The Plaintiff complied with all policy requirements and deadlines for submitting the claim. - Element 3. Defendant failed to conduct a full, fair, prompt, and thorough investigation of all the bases of the claim. The defendant did not properly investigate the claim, meaning they failed to look into all the reasons behind it in a complete, fair, and timely manner, which is a key part of proving that they acted in bad faith regarding the insurance policy.
Facts that might support this element look like:
* The Defendant only reviewed a limited number of documents related to the claim, ignoring key evidence that could have influenced the outcome.
* The Defendant failed to interview critical witnesses who had firsthand knowledge of the events surrounding the claim.
* The Defendant did not seek expert opinions that were necessary to fully understand the complexities of the claim.
* The investigation was conducted over an unreasonably long period, causing unnecessary delays in the claims process.
* The Defendant disregarded the claimant’s repeated requests for updates and additional information regarding the status of the investigation. - Element 4. Plaintiff was harmed. In a bad faith insurance claim, the plaintiff must show that they suffered real harm, such as financial loss or emotional distress, because the insurance company unfairly denied or delayed their claim, leaving them without the support they were entitled to.
Facts that might support this element look like:
* The plaintiff incurred significant medical expenses due to injuries sustained in the accident, which were not covered by the insurance policy.
* The plaintiff experienced a loss of income as a result of being unable to work during recovery from the accident.
* The plaintiff suffered emotional distress and anxiety due to the insurance company’s refusal to pay valid claims.
* The plaintiff faced foreclosure on their home because the insurance company delayed payment for necessary repairs.
* The plaintiff had to take out loans to cover expenses that should have been paid by the insurance policy, resulting in additional financial strain. - Element 5. Defendant’s failure to properly investigate the claim was a substantial factor in causing the harm. The defendant’s lack of a thorough investigation into the claim played a major role in causing the harm, meaning they didn’t do their job properly, which contributed significantly to the negative outcome for the person making the claim.
Facts that might support this element look like:
* The Defendant did not review all relevant documents submitted by the claimant, which included critical evidence supporting the claim.
* The Defendant failed to interview key witnesses who could have provided essential information regarding the circumstances of the claim.
* The Defendant ignored expert opinions that contradicted their initial assessment of the claim’s validity.
* The Defendant delayed the investigation process, causing unnecessary harm and distress to the claimant.
* The Defendant relied solely on a single, biased source of information without seeking additional evidence or perspectives.
(See California Civil Jury Instructions (CACI), No. 2332.)
If you’re in court without a lawyer and plan to assert a claim of Bad Faith Insurance, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge to effectively navigate your legal journey.
Prove Your CA Bad Faith Insurance Claim
U.S. Civil Cases Only