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Dawson and Rosenthal

What is Insurance Breach of Contract?

When a person enters into a contract, they should be able to expect the other party involved to uphold their end of the agreement. Unfortunately, there are times when this does not happen. When you take out an insurance policy, you are agreeing to a contract between yourself and the insurance carrier. But what happens if the insurance carrier breaches the contract? An insurance company, once committed to a policy, is bound by the law in California to support and assist the policyholder. Unfortunately, there are times when the insurance carrier breaches their end of the agreement in various ways. Here, we want to examine what a breach of contract looks like in these situations and discuss what you can do if you think your insurance carrier is guilty of bad faith insurance practices.

When Does Breach of Contract Take Place?

There are various ways in which an insurance carrier could be guilty of breach of contract with their policyholder. Bad faith insurance practices are almost always going to involve issues of breach of contract.

The following include some of the typical ways in which a breach of contract occurs between an insurance carrier and a policyholder:

  • The insurance carrier unreasonably denies a claim.
  • The insurance carrier fails to provide assistance to the policyholder.
  • The insurance carrier delays paying a valid insurance claim.
  • The insurance carrier misinterprets the language of the policy.
  • The insurance carrier denies the benefits listed in the policy.
  • The insurance carrier denies the claim without proper investigation.
  • The insurance carrier fails to defend the policyholder in the event a liability claim is made by another party.

Is a Breach of Contract Considered Insurance Bad Faith?

Insurance bad faith involves the insurance carrier’s refusal to pay a claim without any reasonable basis or without properly investigating the claim in question. Insurance bad faith is illegal, and specifically governed under California state law. Insurance carriers in this state owe a duty of good faith and fair dealing to any person they insure and have a contract with.

A breach of an insurance contract by the insurance company could leave the carrier open to claims of bad faith insurance practices. If you suspect you have been the victim of bad faith insurance practices at the hands of your insurance carrier, you should speak to an attorney about your case immediately. If you have been the victim of bad faith insurance practices, you may be able to secure compensation, not only for the original incident in question but also for what you have been through concerning the incident of bad faith.

When To Contact a Lawyer

If you or a loved one think that you have been treated unfairly by an insurance carrier, you need to speak to an attorney as soon as possible. Attorneys that handle bad faith insurance claims understand that there are time limits involved in these cases. This time limits are called the statute of limitations, and there are two of them you need to be aware of in these situations:

  • If your bad faith claim is a tort case (meaning that the claimant suffered some sort of loss or harm), then there is a two-year statute of limitations in place.
  • If your bad faith insurance case revolves around a breach of contract claim, then you have a four-year statute of limitations in place.

Failing to file a claim within the specified time limits will likely result in a claimant being unable to recover any compensation from the insurance carrier, even if it is clear that the insurance carrier operated in bad faith.

Aside from the time limits involved in these cases, claimants need to be aware that proving bad faith insurance and a breach of contract can be incredibly difficult. Most individuals do not have the legal experience or resources necessary to conduct a full investigation, especially when they are going up against well-funded insurance carriers. A bad faith insurance attorney in San Diego is going to understand all of the state laws regarding the conduct of insurance carriers. An attorney will be able to gather all of the evidence needed to prove an insurance breach of contract case and will work to secure full compensation on your behalf.