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The California Appellate Court recently ruled in a published opinion that an insurer cannot escape liability for a breach of the implied covenant of good faith and fair dealing claim (bad faith), because its coverage position was based an outside consultant’s findings. In the case, Fadeeff v. State Farm General Insurance Company,1 the court considered State Farm’s bold contention that an insurer should automatically be considered to have acted in good faith if its claim decision is based on an independent expert’s conclusions.…
Continue Reading Can an Insurer Avoid Bad Faith Liability by Claiming it Relied on the Opinion of an Outside Consultant?

Due to the extensive loss and damage that wildfires have caused to California insureds in the last several years, the legislature has continued to pass changes to the law that benefit policyholders. We are only a little more than a quarter through 2020 and the legislature continues to focus on expanding policyholders’ rights.…
Continue Reading California Legislature Introduces Even More Policyholder Friendly Legislation and Regulations

On March 31, 2020, six Northern California Bay Area counties significantly limited construction activity. These orders will result in thousands of construction projects shutting down until at least May 3, 2020. What impact does this have on existing property insurance claims? The answer: a lot, and they will probably result in significant legal disputes.…
Continue Reading California Bay Area Shuts Down Construction – How Does This Affect an Ongoing Business Claim?

We keep stressing—and cannot stress enough—that effectively communicating an insurer’s bad faith conduct will help you go further in resolving insurance disputes. A great way to get a carrier’s attention is your ability to identify an insurer’s bad faith conduct, bring the conduct to the carrier’s attention, and explain why such conduct is prohibited. In this blog post, I’ll focus on what insurer conduct in California will demonstrate an insurer’s failure to conduct a thorough investigation. As a best practice, it is always good to let an insurer know the source prohibiting the alleged bad faith conduct. The source will always be either a statute, regulation, or case law. I have included applicable sources.…
Continue Reading Another Quick California Guide to Holding an Insurer Accountable – What Constitutes a Bad Faith Lack of a Thorough Investigation

California has an insurer of last resort for fire coverage, the FAIR Plan, which I explained in detail in a previous post, What Is The California FAIR Plan? In late 2019 in the wake of hundreds of thousands of non-renewals, California Insurance Commissioner Ricardo Lara ordered the FAIR Plan to start selling more comprehensive policies that cover more perils than just fire. The order was set to take effect in 2020. However, in December 2019, the insurance industry filed a lawsuit to bar its enforcement.…
Continue Reading California Court Blocks Insurance Commissioner’s Order That FAIR Plan Expand Coverage Options

Perhaps the most universally misunderstood aspect of insurance litigation in California is what the potential outcomes look like for the insured. Some policyholders fear the insurance company will tie them up in litigation for years and drain them emotionally, while others think a jury will swiftly award them tens of millions in punitive damages. The truth is somewhere in between. Insureds need their attorneys to help them understand the realistic outcomes. Insureds who misunderstand this early on will find themselves in trouble down the road when comes time to make the hard decisions.…
Continue Reading What Are the Risks and Rewards of a Bad Faith Lawsuit in California?

Wildfires have ravaged California the last several years. In addition to the devastation caused, the wildfires have also brought unfair property insurance terms and insurance carriers’ claim practices to light. Fortunately for California policyholders, the legislature has addressed some of these issues, which we have featured in prior blog posts. The California Assembly has already, in 2020, introduced some new legislation that will be friendly to policyholders. It is contained in Assembly Bill No. 182 and is summarized as follows:…
Continue Reading California Assembly Introduces More Policyholder Friendly Legislation

Our client owns a large food market. Last summer, it burned down. The client submitted a claim under his business insurance policy from Farmers. The insurance policy included several different types of coverage, such as Business Property, Business Income, Extra Expense, and more. The insured had insufficient insurance limits under his Business Property to replace everything needed to reopen the market. Thus, he sought coverage for those items under Extra Expense coverage. By the plain and clear terms of the policy, these items were also covered under Extra Expense. But Farmers found an excuse to wrongfully deny the claim in a textbook example of how not to interpret and apply insurance policies in California.…
Continue Reading Can Business Losses Be Covered Under Multiple Parts of Your Policy?

California is a beautiful state. When I was meeting with our California attorneys and staff at our holiday party, I mentioned that there are so many different and beautiful areas, it is no wonder California is our most populated state. Unfortunately, with wildfires, earthquakes, landslides, and floods, California has its share of insurance problems—especially a recurrent problem of homeowners finding they are underinsured and without sufficient policy limits after large scale catastrophes.…
Continue Reading Should Homeowners Policies Have No Policy Limits?