When you pay your insurance premiums, you are buying a promise that your insurer will treat you fairly and honor a valid claim. When an insurance company breaks that promise by denying, delaying, or underpaying a legitimate claim without a reasonable basis, it may be acting in bad faith. If a Los Angeles insurer has treated you or your business unfairly, an insurance bad faith lawyer at Callahan & Blaine, PC can help you hold the company accountable. You can learn more about the firm’s broader coverage work on our insurance litigation page.
Callahan & Blaine, PC has represented Californians since 1984, and our practice is led by trial attorney Edward Susolik, who has built a national reputation in insurance and bad faith litigation and is recognized among the Top 100 Attorneys in Southern California by Super Lawyers. With more than 32 attorneys and years of experience on both sides of insurance disputes, our team understands the tactics carriers use and how to counter them.
What Is Insurance Bad Faith in California
Every insurance policy in California carries an implied covenant of good faith and fair dealing, which means the insurer has a legal duty to handle your claim honestly, promptly, and fairly. When an insurer unreasonably withholds the benefits due under a policy, it breaches that duty and can be liable for bad faith. California law also sets standards for fair claims handling through the Unfair Insurance Practices Act, found at California Insurance Code section 790.03, which identifies practices such as misrepresenting policy provisions, failing to investigate promptly, and failing to offer a fair settlement when liability is clear. What makes a bad faith claim significant is that it can sound in tort as well as contract, so a policyholder may recover more than the unpaid benefits alone.
First-Party and Third-Party Bad Faith
Bad faith arises in two broad settings, and the difference matters for how a claim is built.
Your own insurer mishandles a claim you make under your policy, such as a property, health, disability, or business coverage claim. Common examples include an unreasonable denial, an unfounded delay, a lowball offer, or payment of only partial benefits.
Your liability insurer fails to protect you when a third party makes a claim against you, such as refusing to defend you, declining to pay defense costs, or failing to settle within policy limits and exposing you to a judgment beyond your coverage.
Common Bad Faith Tactics
Insurance companies are businesses, and some look for reasons to pay less than a claim is worth. Our Los Angeles insurance bad faith attorneys frequently see the following conduct.
Rejecting a valid claim without a clear or accurate explanation, or relying on a strained reading of policy language.
Ignoring evidence, failing to interview witnesses, or disregarding reports that support the claim.
Dragging out the process without a valid reason to pressure a policyholder into accepting less.
Offering far less than a claim is worth, or paying only part of the benefits actually owed under the policy.
Damages Available in a California Bad Faith Case
Because a bad faith claim can sound in both contract and tort, the compensation available often goes beyond the benefit that was wrongly withheld. Depending on the facts, a policyholder may recover the following:
- The unpaid policy benefits, meaning the amount the insurer should have paid under the contract.
- Consequential economic losses, such as costs incurred because the claim was wrongly denied or delayed.
- Emotional distress damages, which are available in a bad faith tort claim in appropriate cases.
- Attorney fees incurred to recover the withheld benefits, under the rule recognized in Brandt v. Superior Court.
- Punitive damages, where the insurer acted with oppression, fraud, or malice.
Meet Edward Susolik, Los Angeles Insurance Bad Faith Attorney
Edward Susolik
Chief Executive Officer, President, and Senior Trial Attorney, Callahan & Blaine, PC
Edward Susolik leads the trial practice at Callahan & Blaine, PC and has devoted much of his career to insurance and bad faith litigation, representing policyholders against the carriers that fail to honor their obligations. He has been recognized among the Top 100 Attorneys in Southern California by Super Lawyers for many consecutive years and is a frequent lecturer and author on California insurance law.
Working alongside a firm of more than 32 attorneys, Mr. Susolik and the Callahan & Blaine, PC team prepare each bad faith matter for trial from the start, which gives policyholders a stronger position in negotiation and a firm ready for the courtroom when an insurer will not pay what it owes.
How Callahan & Blaine, PC Approaches Your Bad Faith Case
California places time limits on both contract and bad faith claims, and delay can allow evidence of the insurer’s conduct to grow stale, so it helps to act promptly. Our team explains how fees work during your first meeting so you can make an informed decision before you decide to move forward.
1Policy and Claim Review. We examine your policy, the claim file, and the insurer’s communications to identify where the carrier fell short of its duty of good faith.
2Documenting the Conduct. We assemble the record of unreasonable denial, delay, or underpayment, and quantify both the withheld benefits and the resulting harm.
3Negotiation. We press the insurer to pay what it owes, and our record of taking cases to trial gives that demand weight.
4Trial. If the carrier will not pay a fair amount, our trial-ready preparation means we are prepared to present your case to a jury.
Frequently Asked Questions About Los Angeles Insurance Bad Faith Claims
What is insurance bad faith under California law?
Every insurance policy in California includes an implied covenant of good faith and fair dealing. Insurance bad faith occurs when an insurer unreasonably fails to honor that duty, for example by denying a valid claim without a reasonable basis, delaying payment, or offering far less than the claim is worth. California Insurance Code section 790.03 also lists unfair claims practices that can support a claim.
What is the difference between first-party and third-party bad faith?
First-party bad faith involves your own insurer mishandling a claim you make under your policy, such as a property or disability claim. Third-party bad faith involves your liability insurer failing to protect you against a claim someone else makes against you, such as refusing to defend you or failing to settle within your policy limits.
What damages can I recover in a bad faith case?
Because a bad faith claim can sound in tort as well as contract, you may recover the unpaid policy benefits, consequential economic losses, emotional distress damages, and the attorney fees incurred to obtain the withheld benefits under the rule in Brandt v. Superior Court. Where the insurer acted with oppression, fraud, or malice, punitive damages may also be available.
How do I prove my insurer acted in bad faith?
The central question is whether the insurer’s conduct was unreasonable, meaning it lacked a proper basis for withholding benefits. Evidence often includes the claim file, the insurer’s internal notes, the policy language, the timeline of the handling, and communications showing inadequate investigation or an unfounded denial. A careful review of that record is usually where a bad faith case is won or lost.
How long do I have to bring a bad faith claim in California?
Time limits depend on how the claim is framed. A bad faith tort claim generally has a two-year limitations period, while a claim for breach of the insurance contract generally has a longer period. Because the deadlines vary with the facts, and because evidence can fade over time, it is best to speak with an attorney promptly rather than assume you have unlimited time.
Contact the Los Angeles Insurance Bad Faith Attorneys at Callahan & Blaine, PC
Callahan & Blaine, PC has represented Californians since 1984, and our practice is led by trial attorney Edward Susolik, who has built a national reputation in insurance and bad faith litigation and is recognized among the Top 100 Attorneys in Southern California by Super Lawyers. With more than 32 attorneys, our Los Angeles team is prepared to stand up to insurers that refuse to honor their obligations and to recover the full amount our clients are owed.
Evidence of an insurer’s conduct is strongest early and California law limits the time you have to act, so do not wait to protect your claim. Contact Us to Submit Your Potential Case, and a member of our team will review your policy and the insurer’s handling of your claim and explain the options available to you.
