In California, insurance companies trying to avoid allegations of infidelity, whether in litigation or not, will often ask insureds whether they are willing to enter into " White exceptions" agreements. is to allow an insurance company to offer a settlement without fear that the amount of the settlement will be used as evidence against the carrier of bad faith, if the perceived amount of the settlement offer is too low.  White exception is based on the case of White v. Western Title Insurance Company . 1 In that case, the white family sued their insurance company for breach of contract and bad faith.At the trial, the white family won after the court ruled that their insurance company acted in evil believe after they have filed their lawsuit by only offering settlements of $ 3000 and $ 5000 for the loss of their land without offering the whites a written assessment to support these figures. After a jury found that the value of the land was $ 8400, above lowball offers, it also found that the carrier acted in bad faith. Even after the insurance company appealed, the California Supreme Court ruled that the duty in good faith does not end when a lawsuit is filed. Although such offers may be inadmissible to prove liability for breach of contract, they are permissible to prove breach of the union in good faith and fair trade or bad faith.
Case White acknowledges that insurance companies in California have a duty to act in good faith through litigation. Insurance companies, which receive information that is often filtered by insurance lawyers, often forget that this obligation exists, and deny reasonable settlement claims and delay insured reasonable requests for discovery as a trial is often unavoidable. After the case White insurance companies began to draw up written agreements in which they would release themselves from liability for lowball offers by having insured waiver rights for a certain period of time.
When an insurance company approaches one of my customers with a white exception, I inform my customers that the insurance company will make a settlement offer based on the information they have in front of them. Unfortunately, the trend is growing with the ability of some insurance defense attorneys to offer illusory white exceptions, only to make low ball offers ̵
This trend also occurs before disputes, where carriers approach the insured or their public adjuster with such an agreement. If the insured is not explained carefully, the agreements can continue forever. Sometimes insureds call to explain that they have received "lowball" offers for several months and how it really must be bad behavior, just to find out that the carrier has protected itself with a white exception.
with a white exception, an insured should have a lawyer from the Merlin Law Group review and amend it to make sure they can get out of it if the promise of a settlement offer is only illusory and a tactic. to delay an insured day in court.
1 White v. Western Title Ins. Co. 710 P.2d 309 (Cal. 1985).