California law states that in a contract between an insurer and policyholder there is a clause called implied covenant of good faith and fair dealing. In laymans terms, this means the company must act in good faith throughout the contract and cannot interfere with a policyholders rights. Policyholders have rights to:
- Receiving coverage for covered risks
- A proper investigation into a liability for an injury
- Using good faith to settle all claims
- Defending the insurer against claims by third parties
When an insurance company fails to uphold these rights, it can be considered a breach of the covenant of good faith and fair dealing. This means a policyholder can instill the help of the experienced Los Angeles personal injury lawyer to file a legal claim for insurance bad faith.
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