When you purchase an insurance policy, you enter into a contract with your insurer, expecting protection and peace of mind. However, what happens when an insurance company fails to live up to its promises? In California, policyholders who find themselves with a claim that has been unfairly denied, or subjected to unreasonable delays by their insurer, may have been subjected to bad faith actions from their insurance company.
An insurance company acting in bad faith may be ordered to extra contractual damages above and beyond the amount owed under the claim. This compensation covers not only out-of-pocket expenses or borrowed funds to address damage but also missed work and attorney’s fees.
There is also the potential for punitive damages when an insurance company acts particularly egregious. Punitive damages are awarded to punish the insurance company for its wrongdoing and to discourage it from acting the same way in the future with other policyholders.
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