Bad Faith Insurance Liability Issues in Los Angeles

Insurance is a business of trust. Insurance companies have a strong position because of the unequal bargaining power between the health insurance companies and the policyholders. As a result, the law in California recognizes that when insurance companies wrongfully withhold medical treatment that is medically necessary, experimental, or investigational, they act in bad faith.

In California, the definition of bad faith is where a health insurance company withholds medical treatment unreasonably or without proper cause. Through public policy to protect policyholders and the unequal bargaining power, the law provides for extra damages, referred to as tort damages, for a bad faith breach of contract. A seasoned bad faith insurance lawyer is knowledgeable about bad faith insurance liability issues in Los Angeles and could help you file a claim to recover damages.

How Insurance is Different From Other Services

People buy health insurance hoping they stay healthy and do not develop a serious illness or disease, or have an injury in an accident. However, people believe their insurance company will act in good faith and provide the necessary medical treatment if they need medical care.

Insurance is different than other types of businesses. When an individual goes to buy a coffee, they can smell the coffee, drink the coffee, and taste the coffee. Because health insurance is something people buy hoping to never seriously need, the law recognizes the unequal bargaining power and allows the policyholder to recover the tort damages if there are any bad faith insurance liability issues in Los Angeles.

The policy behind the bad faith law is to protect policyholders. The reason for punitive damages against health insurance companies is to keep people safe. It is to punish bad conduct and prevent it from happening in the future. The insurance industry has special obligations to customers that other industries do not.

Determining Bad Faith Liability

Under California law, the health insurance company is liable for bad faith when they unreasonably, or without proper cause, withhold medical treatment such as surgery, medication, durable medical equipment, or other medical services covered under the health insurance company’s contract. When a physician prescribes medical treatment for their patient that is covered under the health insurance contract, the health insurance company should cover the treatment when it is medically necessary and is in the insurance policy.

Often, health insurance companies realize that expensive medical treatments may come with greater expenses and lower profits. Frequently, health insurance companies put profits over patients to maximize the value for their stockholders and help the insurance company make bigger profits. Bad faith insurance liability issues in Los Angeles is when a patient’s medical treatment is denied by their health insurance company unreasonably or without proper cause.

Insurance Company Transparency During Bad Faith Claim Cases

The law provides that the insurance company must act in good faith and may not deny medical treatment without proper cause. Insurance companies are rarely transparent in denying treatment. In litigation after a lawsuit is filed, health insurance companies are not transparent. It takes tenacity, digging, cunning, time, and effort to diligently pursue litigation to obtain all the relevant documents and investigation relating to the reason the health insurance company denied treatment.

To obtain all relevant information, a health insurance bad faith lawyer files motions with the court to compel the health insurance companies to provide important documents that reflect how the insurance company developed its policies to deny medical treatment. While insurance companies have a duty of good faith and fair dealing and are supposed to be transparent in their operations, usually they are not.

When Might a Bad Faith Claim Be Successful?

Bad faith cases may be successful when insurance companies denied medical treatment unreasonably and without proper cause. When a health insurance company properly denied medical treatment because the treatment truly was not medically necessary, experimental, investigational, or was not covered under their insurance policy, the bad faith claim may not be successful.

When a patient needs treatment that is medically necessary and supported by the patient’s treating doctors, bad faith cases can be successful to help the patient get treatment and help thousands of other similar patients get the same treatment. When insurance companies set up policies and procedures that wrongfully deny medically-necessary treatment, a bad faith lawsuit can help protect patients and keep policyholders healthy by ensuring that health insurance companies are transparent, honest, trustworthy, and act in good faith.

Risks Caused by Insurance Companies Acting in Bad Faith in Los Angeles

When health insurance companies act in bad faith, it could result in serious injuries, long-term complications, and even death. People trust health insurance companies financially to not raise their rates too high because insurance is expensive. Policyholders also trust insurance companies to cover the medical treatment they need and to not wrongfully deny care.

People’s lives are on the line when health insurance companies wrongfully deny medical treatment. Therefore, if you encounter any bad faith insurance liability issues in Los Angeles, contact a dedicated lawyer who could fight on your side to protect your rights.