After almost 200 trials and approaching 46 years in practice, I have watched the same scene unfold over and over: a policyholder files a legitimate claim, expects their insurer to honor the policy they paid premiums on for years, and the insurance company stonewalls, lowballs, or flatly denies with little explanation. Insurance companies aren’t automatically your adversary, but when a carrier puts its own bottom line ahead of the promises it made to you, California law gives you a real remedy. It’s called “insurance bad faith,” and most policyholders don’t know they have one until it is almost too late to use it.
The legal foundation. Every insurance policy issued in California carries an implied covenant of good faith and fair dealing. The California Supreme Court made this binding in Comunale v. Traders & General Ins. Co. (1958), and sharpened it in Egan v. Mutual of Omaha Ins. Co. (1979): an insurer breaches that covenant when it unreasonably withholds or delays payment of benefits owed under the policy. This isn’t just a contract issue. Bad faith is a tort. This changes what you can recover and how a jury is allowed to think about it.
What bad faith actually looks like. California Insurance Code section 790.03 lists the conduct our legislature has identified as unfair claims practices: misrepresenting policy terms, failing to acknowledge or promptly investigate a claim, denying a claim without a reasonable basis, making settlement offers far below what the policyholder is reasonably owed, or simply dragging the process out in the hope the claimant gives up or settles cheap out of exhaustion. I’ve tried cases built on exactly this pattern: a clear claim, a thin investigation, and a denial letter that doesn’t hold up once you put the adjuster on the stand.
What’s actually at stake. A bad faith case isn’t limited to the amount the policy should have paid. Because it is a tort, the jury can award damages for emotional distress, consequential economic losses caused by the delay or denial, and under Brandt v. Superior Court (1985), the attorney’s fees the policyholder had to spend just to demonstrate coverage. In the most egregious cases, where the insurer’s conduct rises to malice, oppression, or fraud, the jury can assess punitive damages.
What to do right now if this sounds familiar. Document everything in a journal: every call, every adjuster’s name, every date. Get the denial in writing with the stated reasons; vague or boilerplate language is itself a red flag. Do not take the first lowball offer just to make the problem go away, and don’t sit on it. These claims have real deadlines, and waiting costs you leverage as well as time.
If your insurer denies, delays, or shortchanges a claim you are entitled to, you do not have to accept that as the final word. I have spent four decades in courtrooms holding insurance companies to the bargain they made with their policyholders. Call my office at (714) 673-6500 or visit juryattorney.com/contact-us/ to talk through what happened and find out whether your insurer crossed the line from hard bargaining into bad faith.
