Most California authorities state that the "implied agreement of good faith and fair trade" compels the insurer to investigate, process, and evaluate the policyholder's claims quickly, thoroughly, and fairly. 1 The basic case describes bad faith as the insurer's behavior which impairs the insured's right to receive the benefits for which they agreed. 2 My favorite line from case law describes bad faith as an "imprecise label for what is essentially some form of unreasonable insurer's behavior [.]" 3
Accuracy is of "the most critical factors which affects the good faith of the insurer. " 4 " [I] It is important that an insurance company fully asks [1
When the court decides whether a claim adjustment was fair, it may consider the insurer's purpose and attitude. 10 “[W] While an insurer's subjective bad intentions are not a sufficient basis for determining an unreasonable cause of action, the insurer's subjective mental state may still be a factor to be considered in evaluating the objective reasonableness of the insurer's actions. 11 An insurance company looking for ways to deny a claim rather than find coverage can probably act unfairly and in bad faith. 12 Similarly, it can be bad to try to discourage insured persons from pursuing their claims. 13 The lack of objective requirements for adjusting claims may also reflect an unfair investigation. 14 Failure to comply with application regulations on cable claims is also evidence of bad faith. 15
Insurers often answer that they have "the right to be wrong". But an erroneous decision can not be in good faith "unless it is based on a basis that is reasonable in all circumstances." 16 "An expert's testimony will not automatically isolate an insurance company from an unfaithful allegation based on a biased investigation." 17 Thus, an insurance company cannot isolate itself from liability for bad faith by " the simple purpose of employing an expert for the purpose of presenting a "genuine dispute." 18  At the end of the day, whether bad faith exists is "a matter of fact" that requires consideration and weighing of all circumstances. 19 Although this summary of evil beliefs may be helpful, is it is not definitive. Lawyers exist for a reason, it's not just writing blog posts. We are available to help with claims throughout the state of California and nationwide.
1 Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 723.
2 Egan v. Mutual of Omaha Ins. Co. (1979) 24 cal. 3d 809, 818 -819.
3 Austero v. National Cas. Co. (1978) 84 Cal.App.3d 1, fn. 22, disapproved of Egan v. Mutual by Omaha Ins. Co. (1979) 24 Cal.3d 809.
4 Shade Foods, Inc. vs. Innovative Products Sales & Marketing, Inc. (200 0) 78 Cal.App.4th 847, 879.
5 Egan v. Mutual of Omaha Ins. Co. supra, 24 cal. 3d at 818-819.
7 Wilson v. 21st Century Ins. Co. supra, 42 cal. 4th 713, 723.
8 Austero mot National Cas. Co. of Detroit, Mich. supra, 84 Cal.App.3d 1 at 35.
9 Mariscal v. Old Republic Life Ins. Co. (1996) 42 Cal.App.4th 1617, 1624.
10 Hanson By & Through Hanson v. Prudential Ins. Co. of America (9th Cir. 1985) 783 F.2d 762, 767 (Application of Calif. Law.)
11 Bosetti v. U.S.C. Life Ins. Co. (2009) 175 Cal.App.4th 1208, 1239 (original italics.)
12 Wilson v. 21st Century Ins. Co. supra, 42 Cal.4th 713, 721.
13 Hangarter v. Provident Life & Accident Ins. Co. (9 Cir. 2004) 373 F.3d 998, 1011 (applies cal. Law); Delos v. Farmers Group, Inc. (1979) 93 Cal.App.3d 642, 664; Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 575.
14 Wilson v. 21st Century Ins. Co. surpa, 42 kal.4: e vid 721.
16 Wilson v. 21st Century Ins. Co. supra, 42 cal. 4th 713, 724 & fn. 7.
17 Fadeeff v. State Farm Gen. Ins. Co. (2020) 50 Cal.App.5th 94, 102.
18 Ibid. (citations omitted.); see also Brehm v. 21st Century Ins. Co. (2008) 166 Cal.App.4th 1225, 1239-1240 (fails to provide experts with all necessary facts.)
19 Pulte Home Corp. against American Safety Indemnity Co. (2017) 14 Cal.App.5th 1086, 1119.