If an insurance company has denied, delayed, or underpaid your policy benefits, you may have the right to file a claim for financial compensation.
Insurance companies have the right to deny claims when they fall outside of your agreement. But some insurers choose to put profits over policyholders’ interests, avoiding payment for perfectly valid claims, misrepresenting policy restrictions, requesting mountains of unnecessary paperwork, conducting shoddy investigations, and refusing to defend policyholders in lawsuits. Sometimes they deny a claim because the claims handler feels an obligation to save the insurer’s money more than the obligation to take care of its client – you.
Because of the severe effects of insurer misconduct, California law holds insurance companies to stringent standards and gives wronged policyholders have the right to sue insurers who act in bad faith – not only for the claim amount but also for mental suffering and emotional distress damages, legal fees, even punitive damages to punish the misconduct. When a policyholder can prove an insurer acted in bad faith, the court may grant financial compensation totaling far above the policy limit or denied claim amount.