Orange County Bad Faith Insurance Lawyer
Medical insurance companies exist to provide financial protection to their insureds in an unplanned medical incident. Although we trust our insurance companies to handle claims in a reputable manner, they sometimes engage in dishonest, manipulative tactics to avoid paying to cover damages you are rightfully owed. From attempting to mislead you about your rights to omitting vital information regarding your policy, medical insurance companies use several strategies to minimize your damages, delay your case, or refuse to reach a fair settlement.
Learn more about bad faith medical insurance claims by reviewing the information below, then contact Winthrop Law today to discuss your case. Our firm has years of experience negotiating with insurance companies, and we have the knowledge, resources, and litigation skills to hold your insurance company accountable for acting in bad faith.
What Is Insurance Bad Faith?
Individuals and businesses pay into medical insurance policies to ensure that they can recover financial damages that result from a loss covered by the policy. In exchange for these payments, insurance companies owe policyholders certain obligations, such as:
- Informing you of your available coverage options
- Conducting a thorough investigation into your claim
- Assessing the validity of the claim according to the terms of your policy
- Calculating a reasonable value of your damages
- Approving valid claims
- Offering a fair settlement amount and paying it within a specific time frame
- Offering reasonable explanations when denying claims
- Handling the processing of your claim promptly and without delay
If an insurance company denies a valid claim and refuses to provide a sufficient reason for doing so, they are considered to be acting in bad faith. When they do this, they typically take steps to suppress evidence so they can allege their actions were mistakes rather than intentional decisions designed to avoid paying what you are owed.
Can I Pursue a Claim Against My Insurance Company for Acting in Bad Faith?
Insurance bad faith is enforced through common law bad faith and statutory bad faith. Common law bad faith is established through precedents set in specific cases and requires the claimant to prove the following elements:
- You had a valid claim according to the terms in your policy, and the insurer denied this claim and withheld benefits due to you under the policy.
- The reason for denying the claim and withholding these benefits is unreasonable.
Many states have their own guidelines for determining whether a reason for denying a valid claim is reasonable, which results in different interpretations among different states.
Statutory bad faith is established through specific state legislation that explicitly identifies grounds for claim denial that can be considered acting in bad faith. Most states use the principles stipulated in the Unfair Claims Settlement Practices Act developed by the National Association of Insurance Commissioners (NAIC). This act serves as a model that states can use to enforce bad faith law.
In California, insurance bad faith is governed by a version of this model called the Fair Claims Settlement Practices Regulations. These statutes describe what actions constitute good conduct on behalf of insurance companies and detail certain standards for ensuring these companies act in good faith when evaluating claims by policyholders. Insurance companies must adhere to the “Standards for Prompt, Fair, and Equitable Settlements” to prove they are acting in good faith.
A claimant who believes their medical insurance company is acting in bad faith can pursue a breach of contract claim or a tort claim. A breach of contract claim is based on the idea that your insurance company is legally obligated to pay what they owe you based on the terms outlined in their policy, so unreasonably refusing to do so is a breach of contract. In a tort claim, you allege that the refusal of your valid claim has caused you to sustain damages.
The statute of limitations for filing an insurance bad faith claim varies based on the type of claim you pursue. You have four years from the date of the denial to file a breach of contract claim and two years from the date of the denial to file a tort claim.
What Are Valid Reasons for Denying a Claim?
While your insurance company may have acted in bad faith by denying your claim, there are several valid reasons for denying a claim, such as:
- Your policy does not cover your accident.
- You were not current on your payments at the time of the accident.
- You failed to verify your damages with substantiating evidence.
- You failed to file your claim within the statute of limitations.
What Are Common Examples of Insurance Bad Faith?
Common examples of a medical insurance company acting in bad faith include:
- Denying valid claims or delaying approval
- Offering unreasonably low settlement awards
- Intentionally misleading you about the statute of limitations for your claim
- Misrepresenting policies or the terms they contain
- Changing the terms of your policy without first receiving your consent
- Attempting to dissuade you from hiring an attorney by offering an incentive
What Damages Can I Recover in an Insurance Bad Faith Claim?
An Orange County bad faith insurance lawyer can help you recover the following damages:
- Compensatory damages, or the original amount the insurance company owes the policyholder for their claim.
- Emotional distress and other economic losses resulting from the claim denial.
- Attorney fees for retaining an insurance bad faith lawyer.
- Punitive damages in cases of “willful, egregious, and widespread” bad faith.
How Do I File an Insurance Bad Faith Claim?
Filing an insurance bad faith claim requires completing the steps outlined below.
- Collect relevant documentation, including the initial claim and any medical records, bills, or other information pertinent to your case.
- Review the terms of your policy to confirm your claim should have been accepted and that the denial was made in bad faith.
- Document the denial to prevent your insurance companies from revising it at a later date.
- Appeal the denial by requesting a review of your case to ensure the denial was not made erroneously before pursuing a claim against your insurance company.
- Write a demand letter and send it to your insurance company. The letter should include your reasons for submitting the claim, evidence supporting your claim, and an explanation for why you think they should have approved your claim.
- File a complaint with the California Department of Insurance to initiate an investigation into your case and advise you on how to proceed. While they cannot force your insurance company to pay your damages, you can use their findings as evidence to support your insurance bad faith claim.
- If your insurance company has failed to respond in an appropriate and timely manner, you should file an insurance bad faith claim against them. An attorney specializing in this area of the law can provide legal representation, protect your rights, and conduct negotiations with your insurance company to help you achieve the best outcome.
How Do I Know My Insurance Company Is Acting in Bad Faith?
If your insurance company engages in any of the following behavior when you file a valid claim, they may be acting in bad faith:
- Lack of communication—Failure to respond to emails, phone calls, or letters in a prompt manner can indicate inattentiveness, poor client service, or acting in bad faith.
- Low settlement offers—Insurance companies can attempt to avoid paying the full amount you are owed by offering lowball settlements insufficient to cover your damages.
- Delayed payment of claims—California law requires insurance companies to pay your claim no more than 30 days after processing it and determining the appropriate compensation amount. Delaying the payment beyond this time without providing a valid reason can be considered acting in bad faith.
- Unreasonable demands—Insurance companies require thorough documentation before making a payment, but sometimes they make unreasonable demands that may be in bad faith, such as requesting medical records or forcing you to complete unnecessary forms.
- Revision of your policy without notification—You are legally entitled to be notified of any changes your insurance company makes to your policy. Because they can deny your claim based on the terms of your policy, they may revise the policy without notice to exclude the specific circumstances of your claim.
- Misleading you about policy terms—Insurance companies must clearly understand your policy and the terms it contains, so you understand them. A provider may create their own interpretation of the terms, pretend they do not have adequate knowledge of the facts surrounding your claim, or omit vital information impacting your claim.
Contact Winthrop Law Group to Learn More
Your medical insurance company is legally obligated to accept valid claims. If they denied your claim or are making it unnecessarily difficult to recover damages, they may be acting in bad faith. An insurance bad faith attorney can help you negotiate a fair settlement to deliver you the compensation you deserve. For nearly two decades, Winthrop Law Group has provided expert legal representation and counsel to individuals and businesses throughout Orange County and surrounding areas.
Founder and managing partner Reid A. Winthrop spent the beginning of his career working for insurance companies. This allowed him to gain valuable insight into how they handle claims filed by their insureds and their strategies to avoid paying these claims. As an Orange County bad faith insurance lawyer, he implements this knowledge and litigation experience to represent clients in insurance disputes of all kinds.
If you suspect that your medical insurance company has acted in bad faith, schedule a consultation with Winthrop Law Group today to learn how you should proceed. Our firm offers comprehensive, individualized attention, and we will work diligently to protect your rights and pursue the best possible outcome in your case. We take most cases on a contingency basis, meaning you owe nothing unless we secure a settlement or judgment for you.