Insurance Claims

During a state of emergency declared by the Governor of California, insurers have specific legal obligations under California law to ensure the protection and support of insured individuals and properties.

For residential property insurance, insurers must offer a 60-day grace period for premium payments for properties in the affected area. If a policy is canceled for nonpayment during this period, the insurer must reinstate it without a lapse in coverage or late fees upon timely payment of premiums § 2062. Grace period for payment of premiums during state of emergency. Additionally, insurers cannot cancel or refuse to renew residential property insurance policies for properties within or adjacent to the fire perimeter for one year after the emergency declaration § 675.1. Total loss to primary insured structure; Residential property insurance cancellation or non-renewal due to proximity to wildfire.

In cases of total loss of a primary dwelling, insurers must offer an advance payment of at least 30% of the policy limit for personal property coverage without requiring an itemized claim. Insureds may later file a full claim for additional amounts up to the policy limit. Insurers must also notify insureds of these options when a claim is filed § 10103.7. Combining policy limits for primary dwelling and other structures. For claims involving additional living expenses, insurers must provide an advance payment of at least four months of living expenses upon request § 2061. Special provisions for losses related to states of emergency.

Insurers are also required to provide insureds with a copy of the most recent notice of significant California laws related to property insurance and emergencies within 15 days of receiving a claim § 14046. Provision of adjusting handbook and annual notice of property insurance policy laws to licensees; Notice to claimants; Nonlicensed adjuster requirements; Publication of notice, handbook and certification process. If multiple claims adjusters are assigned to a claim within six months, the insurer must provide a written status report, establish a primary point of contact, and ensure direct communication with the insured § 14047. Reporting and contact requirements for residential claims related to declared state of emergency assigned to third or subsequent first-party claims adjuster.

These obligations reflect the quasi-public nature of insurance services, emphasizing the duty of insurers to act in good faith and prioritize the public interest during emergencies.

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation. You should seek legal advice from your attorney or consider having us represent your case."

If your insurance damage payment is insufficient to cover repair costs after a natural disaster in California, you have several legal options under California law. § 2051.5. Measure of indemnity based on cost of repair, rebuilding or replacement; Minimum time limit; Limitation or denial based on change in location prohibited; Exception for suspected fraud; Time for modification of policy forms provides that under an open policy requiring payment of replacement costs, the insurer must pay the actual cash value of the damaged property until it is repaired, rebuilt, or replaced. Once the property is repaired or replaced, the insurer must pay the difference between the actual cash value and the full replacement cost, up to the policy limits. Additionally, if the policy includes extended replacement cost coverage, the insurer must cover those costs as well, provided they are within the policy terms § 2051.5. Measure of indemnity based on cost of repair, rebuilding or replacement; Minimum time limit; Limitation or denial based on change in location prohibited; Exception for suspected fraud; Time for modification of policy forms.

If the natural disaster occurs during a state of emergency declared by the Governor, California law offers further protections. For instance, insureds may combine payments for claims up to the policy limits for the primary dwelling and other structures if the policy limits are insufficient to cover necessary expenses. Insureds are also entitled to additional living expenses for at least 24 months, which may be extended to 36 months if delays in reconstruction are beyond their control, such as permit delays or a lack of available contractors § 36.13 Fire Damage.

In cases where insurers fail to meet their obligations, you may have legal recourse to enforce your rights. For example, in Conway v. Farmers Home Mut. Ins. Co., 26 Cal. App. 4th 1185, the court held that an insured could recover replacement costs for purchasing another home at a different location, even if the policy did not explicitly require rebuilding on the same premises. Ambiguities in the policy were resolved in favor of the insured Conway v. Farmers Home Mut. Ins. Co., 26 Cal. App. 4th 1185. Similarly, in Tarakanov v. Lexington Ins. Co., 441 F. Supp. 3d 887, the court highlighted issues with insurers denying claims or imposing unreasonable time limits for rebuilding after widespread disasters, which could be challenged as breaches of contractual obligations Tarakanov v. Lexington Ins. Co., 441 F. Supp. 3d 887.

If your insurer denies coverage or provides insufficient payment, you may also consider filing a claim for breach of contract or bad faith. For instance, in State Farm Fire & Casualty Co. v. Von Der Lieth, the court addressed claims of bad faith and breach of contract when an insurer denied coverage for damages caused by excluded perils but failed to account for covered ensuing losses State Farm Fire & Casualty Co. v. Von Der Lieth, 54 Cal. 3d 1123.

Lastly, if you are unable to resolve the issue directly with your insurer, you may seek assistance from the California Department of Insurance or pursue legal action to recover the full amount necessary to repair or replace your property.

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation. You should seek legal advice from your attorney or consider having us represent your case."

In California, damages recoverable in a bad faith insurance lawsuit include compensatory damages, emotional distress damages, attorney's fees, and punitive damages. Compensatory damages encompass policy benefits, economic losses, and emotional distress damages, provided they are tied to actual economic loss. Emotional distress damages are considered an aggravation of the insurer's breach of duty and do not require proof of an intentional tort, but they must flow incidentally from the breach and be tied to financial harm Insurance Bad Faith (CA), Bad Faith Elements State Law Survey.

Attorney's fees are recoverable as economic loss if they are incurred in obtaining wrongfully withheld policy benefits. However, fees incurred in recovering amounts above the policy benefits are not recoverable Insurance Bad Faith (CA), Bad Faith Elements State Law Survey.

Punitive damages are available in bad faith insurance cases if the plaintiff proves by clear and convincing evidence that the insurer acted with oppression, fraud, or malice. This requires showing that the insurer acted willfully, maliciously, or in conscious disregard of the insured's rights, intending to vex, annoy, or injure the insured. The standard for punitive damages is stringent and generally applies to cases involving a continuous policy of nonpayment or egregious conduct by the insurer Insurance Bad Faith (CA), Bad Faith Elements State Law Survey.

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation. You should seek legal advice from your attorney or consider having us represent your case."

Under California law, a bad faith insurance claim arises when an insurer unreasonably withholds or delays payment of policy benefits without proper cause. The ultimate test for bad faith liability in first-party cases is whether the insurer's refusal to pay policy benefits was unreasonable. An insurer's conduct must go beyond mere errors, negligence, or bad judgment; it must involve a conscious and deliberate act that unfairly frustrates the insured's rights under the policy.

The implied covenant of good faith and fair dealing is central to bad faith claims. This covenant obligates insurers to thoroughly investigate claims, give equal consideration to the insured's interests, and not unreasonably delay or deny benefits. If an insurer fails to meet these obligations, it may be liable in tort for breach of the implied covenant Insurance Bad Faith (CA). However, if there is a genuine dispute over coverage or the value of the claim, bad faith liability cannot be imposed, as long as the insurer's position is maintained in good faith and on reasonable grounds.

Additionally, bad faith claims may involve situations where the insurer's actions are particularly egregious, such as acting with malice, oppression, or fraud. In such cases, punitive damages may be awarded if the insured proves these elements by clear and convincing evidence. However, the insurer's conduct must be evaluated in light of the totality of the circumstances, and the reasonableness of its actions is assessed based on the information available at the time of the decision.

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation. You should seek legal advice from your attorney or consider having us represent your case."

If your insurance claim has been denied due to a natural disaster in California, you have several options to address the denial. California law imposes specific obligations on insurers, and you may have recourse under these laws.

First, insurers are required to conduct a thorough, fair, and objective investigation before denying a claim. If the denial was based on an incomplete or inadequate investigation, you may have grounds to challenge the denial. For example, courts have held that an insurer's failure to fully investigate all bases of a claim can constitute bad faith, as seen in cases like Maslo v. Ameriprise Auto & Home Ins., 227 Cal. App. 4th 626 and Maslo v. Ameriprise Auto & Home Ins., 227 Cal. App. 4th 626, Fadeeff v. State Farm General Ins. Co., 50 Cal. App. 5th 94. Additionally, under California Insurance Code § 790.03(h)(5), it is an unfair claims practice for an insurer not to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims where liability is reasonably clear.

Second, if your insurer has denied your claim, they are required to provide a written explanation of the denial, including the factual and legal bases for their decision. This is mandated under California Code of Regulations, Title 10, § 2695.7(b). If the denial lacks sufficient explanation or is based on an unreasonable interpretation of the policy, you may have a claim for bad faith or breach of contract.

Third, if your insurance policy includes earthquake or other natural disaster coverage, you may be entitled to specific benefits. For instance, California law requires insurers to offer earthquake insurance in conjunction with residential property insurance policies. If you declined this coverage, you may not be eligible for earthquake-related claims, but you can still verify whether other aspects of your policy provide coverage for the damage § 10083. Time for making offer; Prescribed language.

Additionally, if you are unable to identify your insurer or need assistance navigating the claims process, you can contact the California Department of Insurance for help. They provide resources and can review claims practices to ensure compliance with state laws § 10103.5. California Residential Property Insurance Bill of Rights to accompany disclosure; Contents, § 2085. Release of information to insurers in the case of declared disaster.

Finally, if your insurer has acted in bad faith, you may pursue legal remedies, including a lawsuit for breach of the implied covenant of good faith and fair dealing. Courts have recognized that bad faith claims can lead to recovery of damages, including punitive damages, if the insurer's conduct was unreasonable or malicious Fadeeff v. State Farm General Ins. Co., 50 Cal. App. 5th 94, Mariscal v. Old Republic Life Ins. Co., 42 Cal. App. 4th 1617, § 41.14 Specific Coverage Issues.

It is advisable to consult with an attorney experienced in insurance law to evaluate your specific situation and determine the best course of action.

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation."

"The information contained here is only for educational purposes. This does not constitute legal advice, or any attorney-client representation. You should seek legal advice from your attorney or consider having us represent your case."