Has your insurance claim been denied?

The denial of your claim by an insurance company will fall into two distinct categories: first party denials and third party denials. A first party denial is a claim which has been denied by your own insurance company, i.e., the insurance company that actually insures you. You may or may not have actually purchased the policy, but by virtue of the facts of the case, you are still a covered insured under the policy because of the applicable coverages. An example of this would be a passenger in an automobile driven by a friend. Even though you did not purchase the policy, and are not a named insured, you become insured by virtue of being a passenger in the automobile. Third party insurance claim denials involve the situation of the injured victim not being insured under the policy, but instead putting in a claim against the insured under that policy, when that insured has been responsible for your injuries. You are not insured directly therefore by that insurance policy.

The law is very clear that an insurance company has a duty to act fairly and in good faith, and to effectuate prompt settlement of claims, whether or not you are a first party insured, or a third party claimant. See California Insurance Code Section 790.03. Incredibly, and as unbelievable and ridiculous as it may seem, the California Supreme Court has ruled that individuals do not have the right to enforce these laws! The invented rationale of the Supreme Court was that the legislature, in passing this law in the Insurance Code to protect people, did not intend it to be enforceable by the people it was designed to protect! In other words, according to the California Supreme Court, the legislature passed the law to protect consumers, but it never intended that those consumers be able to enforce their rights and bring a lawsuit against an insurance company who violates the law. See the California Supreme Court reported decision of Moradi Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 758 P.2d 58. This type of legal decision is but one example of how the insurance industry and big business have been successful in hijacking and commandeering our judicial system and obtain effective control of our courts to protect its interests. A law student who would write an answer to a test question which states that the legislature passed a law but did not intend it to be enforced by the people it protected would not only flunk out of law school, but fail the Bar Examination. Today, such legal reasoning abilities apparently qualifies you to be a Supreme Court Justice.

Because of the rulings of the courts, if you are a third party claimant, your remedies against the other party’s insurance company for not promptly, fairly, or in good faith processing your claim, are extremely limited. You most probably will find yourself with the sole remedy of having to bring a lawsuit against the insured who injured you to collect what is owed, but damages you have suffered as a result of having to bring a lawsuit instead of having your claim paid, are rarely recoverable. Despite this tragic legal situation, it is nevertheless imperative and crucial that you have a lawyer review your case whenever you have an injury claim, not only to look for any of the rare exceptions to the rule, but also to look for law violations in the actual calculation of your claim.

If you are first party claimant, i.e., your own insurance company has wrongfully denied or inadequately paid your claim, even though you do not have the statutory right to bring a lawsuit against your insurance company in most cases, you still have a right under the contract of insurance to bring an action against your company for its violation of what the law calls the “Covenant of Good Faith and Fair Dealing”. The failure of your own insurance company to promptly pay your claim, and/or to deal with you fairly and in good faith, subjects the insurance company to legal liability for damages caused by such misconduct. A classic example of this is if you have an uninsured motorist claim with your company by virtue of an automobile accident in which you are injured by an uninsured motorist. Your insurance company owes you a duty to promptly pay this claim, and to investigate and assess it in a fair and good faith manner.

Despite this law protecting you as an insured presenting an uninsured motorist claim, insurance companies frequently, in fact, in the majority of cases, ignore the law, and will engage in a variety of tactics to diminish and/or deny your claim. Even though you are dealing with your own insurance company, if you have an uninsured motorist automobile accident claim, you should always consult with an attorney prior to dealing with your own insurance company. Your company will already have in place a variety of tactics designed to avoid and evade the payment due you, and waiting to consult with an attorney can frequently give the insurance company enough of an opportunity to successfully implement these tactics to allow them to get out of paying what they owe you. If you have already initiated the claim, no matter what stage the claim is in presently, you should immediately consult with an experienced personal injury attorney, because the payment avoidance tactics insurance companies use can sometimes be stopped if recognized. An experienced and competent personal injury lawyer should be able to recognize the tactics, and advise you accordingly. Furthermore, you should be able to receive a free consultation from any reputable experienced and competent injury attorney to assess your case.