One of the great tragedies of life is the murder of a beautiful theory by a gang of brutal facts. – Benjamin Franklin


One personal injury attorney’s opinion.

Just got off the telephone with a client an insurance is treating him unfairly, i.e. low ball offer. He cried out “their out to be a law.” Well, in my early years of personal injury practice there was law for third party cases, but no more . . . let me share with you the theory versus the reality.

In California there exists the California Department of Insurance and they have promulgated “rules and regulations” that insurance companies “must” follow.

In theory insurance companies are suppose to handle claims in fair and prompt manner and treat claimants properly. In theory California insurance companies are suppose to promptly, efficiently and equitably settle claims. They are suppose to acknowledge the receipt of a notification of claim within 15 calendar days after receiving it or at least make a note in the claims file. The insurer must also provide the claimant the necessary forms, instructions and reasonable assistance within 15 calendar days, including specifying the information the claimant must provide for proof of claim. Also, the insurer must begin any necessary investigation of the claim within the same period of time. Furthermore, an insurer must furnish a complete response within 15 calendar days to any communication from a claimant that suggests that a response is expected. And under California law, insurers must advise all claimants of the acceptance or denial of a claim within 40 calendar days of receipt of proofs of claim. If more time is required to determine whether a claim should be accepted or denied, the insurer must provide written notice of the need for additional time within 40 calendar days of receipt of proofs of claim. The written notice shall state the reasons for insurer’s inability to make a determination. Thereafter, written notice shall be provided to the claimant every 30 calendar days until a determination is made or notice of legal action is served.

Great in theory! Who needs a personal injury lawyer? Well what can you do if an insurance company fails to follow the standards? Answer, nothing! I an insurance company violates any of these provisions an injured party cannot “sue” the insurance company for its behavior. Please see Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 , 758 P.2d 58; 250 Cal.Rptr. 116. In this case the California Supreme Court essentially eliminated a private cause of action for an injured party to sue an insurance company’s actions, commonly referred to as bad faith.

The California Supreme Court said “We caution, however, that our decision is not an invitation to the insurance industry to commit the unfair practices proscribed by the Insurance Code. We urge the Insurance Commissioner and the courts to continue to enforce the laws forbidding such practices to the full extent consistent with our opinion.My experience over the last 30 years leads me to believe they missed that paragraph.

I can tell you without a doubt almost 30 years after the Moradi-Shala decision third party cases have gotten more and more challenging. Basically an insurance carrier in California can do whatever it wishes to do with a claimant’s case from a low ball offers to forcing a large or small case to trial.

The California Insurance Code Section 790.03 lists sixteen claims settlement practices that, when either knowingly committed on a single occasion, or performed with such frequency as to indicate a general business practice, are considered to be unfair claims settlement practices and are, thus, prohibited by this section of the California Insurance Code. Nice in theory but the Insurance Commissioner rarely if ever has “gone after” an insurance carrier for violating the act and fines are minimal.

In reality insurance companies make money through premiums and investments. The less the pay out on any claim the more profits they make. Simple enough but ask yourself a question, whose interests are the really watching out for? I think you know the answer to that question. NOT YOURS!!

Most insurance companies are pretty much the same when it comes to adjusting / settling claims. In California some insurance carriers are more difficult to deal with than others.

If you have been handling personal injury claims for any length of time, you know who those carriers are and hopefully have learned how to deal with them effectively and efficiently. If you have been involved in a personal injury matter, even one as seemingly simple as a slip and fall accident, car accident, or a dog bite attack it is a good idea to get a free consultation. At the very least you should know your rights.

There are a many factors that come into play and can affect a claim. Both from the legal side and factual side.

One last thought, threatening an insurance company with suing their insured borders on laughable. Insurance carriers don’t care and litigation does not scare them. They have billions of dollars!!! And another lawsuit does not scare them. In fact many insurance companies now directly employ attorneys to defend cases. So another claim really does not make a difference.

If you need assistance, give me a call. Richard M. Katz, Esq. at 626-796-6333 visit our site






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