CALIFORNIA INSURANCE BAD FAITH I FRAUD I CIVIL LITIGATION – When Does Insurance Fraud and Insurance Bad-Faith overlap?
July 02, 2020
When evaluating claims, an insurer has an obligation to consider the rights and interests of their insured. In the past courts have specifically held that there is a fiduciary-like relationship between the insurance carrier and their insured. This relationship mandates that a carrier advise their insured as to their rights and obligations under the insurance policy. Failure to disclose such information gives rises to a series of claims including: bad-faith, insurance fraud, breach of contract and breach of the obligation of good faith and fair dealings.
In a landmark bad-faith and insurance fraud case, the court held as follows: The insurer’s implied duty of good faith and fair dealing includes “the duty reasonably to inform an insured of the insured’s rights and obligations under the insurance policy. In particular, in situations in which an insured’s lack of knowledge may potentially result in a loss of benefits or a forfeiture of rights, an insurer [is] required to bring to the insured’s attention relevant information so as to enable the insured to take action to secure rights afforded by the policy.” (Davis v. Blue Cross of Northern California (1979) 25 Cal.3d 418, 428 [158 Cal.Rptr. 828, 600 P.2d 1060].)
In short an insurance carrier has acted in bad-faith and otherwise breached their obligation of good faith and fair dealings, when they fail to keep their insured fully and accurately informed. An insurance fraud cause of action is very similar to a general cause of action for fraud. Specifically fraud by intentional or negligent misrepresentation and fraud by concealment, both cause harm because the Plaintiff is operating based off inaccurate and/or incomplete information. In both of these instances, the victim of fraud suffers because material information is misrepresented or concealed.
For additional articles discussing, insurance fraud and insurance bad-faith claims, please see links below:
To better understand what types of Damages are recoverable in a bad-faith action or Insurance fraud case, see the links below:
Articles discuss Fiduciary Duties, to better explain what is a fiduciary-like relationship, please see the listed below:
Our other articles discussing Fraud in California and causes of action for Fraud in general are included below:
If you are wondering about a potential bad-faith claim or have questions regarding an insurance fraud matter, we invite you to contact us today at 619-432-5145 for a free consultation with one of our experienced Insurance Fraud attorneys and California Insurance Bad Faith Lawyers.