Insurance companies are required to act in a way that protects their policyholders. One major duty that they have is to settle cases when a claimant makes a fair demand that is within the policy’s limit. This commonly occurs when a policyholder is at fault in a car accident case.
If an insurance company receives a fair settlement demand in a case but refuses to accept it, the case may go to trial. Once a case goes to trial, a jury may award compensation in excess of the policy’s coverage. The policyholder is then responsible to pay the excess damages. This is known as an excess verdict and they affect many people in Los Angeles every year.
An insurance company acts in bad faith when they refuse to settle a claim when liability is reasonably clear. This bad faith can be a cause of action for you to sue your insurance carrier in civil court for the excess damages you were ordered to pay. Consult with a knowledgeable attorney about excess verdicts in Los Angeles can help you determine if your insurance company acted in bad faith and to pursue those companies for damages.
Laws Regarding Los Angeles Excess Verdicts
California law is clear concerning the duty of insurers to protect their clients from excess verdicts in Los Angeles. In Reid v. Mercury Insurance Co., 220 Cal.App.4th 262 (2013), the court held that an insurance company has a legal duty to settle a claim made against their policyholder when a third-party claimant makes a settlement demand within the policy limits and liability is reasonably clear. A failure to so do can give rise to a lawsuit for a bad-faith failure to settle.
This concept is important in establishing the idea that insurers must protect their insured. In short, an insurer must protect their clients to the full extent provided in their policy. If an insurer can settle a claim for an amount within policy limits, they must do so if the settlement demand is reasonable. In principle, this shields the policyholder from any excess verdict.
What to Do When Facing an Excess Verdict
California Insurance Code §790.03 (h)(5) states that it is an unfair business practice for insurance companies to not attempt a good-faith settlement of a claim when liability has become reasonably clear. A good-faith attempt can only be made when a third-party claimant makes a clear settlement demand. If this demand is made, and the insurance company refuses to negotiate, a policyholder can claim that their company is in violation of this statute.
If a policyholder wishes to recover any money resulting from excess verdicts in Los Angeles, they must pursue their insurance company in civil court, a process with which a Los Angeles excess verdict attorney may be able to help. A lawyer can consult with clients about their legal rights in a case and develop a strategy to hold insurance companies legally liable for their actions.
Insurance Company’s Fault
Insurance companies have a duty to protect their clients against excess verdicts whenever possible. An insurance company cannot gamble that they may not have to pay anything by going to trial if there is a genuine attempt to settle on the table.
When the liability in a claim is reasonably clear, and the injured party makes a reasonable offer to settle, the law in Los Angeles obligates insurance companies to negotiate a settlement. Failing to do so constitutes bad faith and gives their clients a cause of action in civil court.
If you find yourself facing excess verdicts in Los Angeles, a local lawyer may be able to help. They can examine your insurance policy, analyze the evolution of your claim, and pursue lawsuits for bad faith. There is a strict time limit to file a claim, so don’t hesitate—call today to see what can be done in your case.
