California and federal lawmakers have been talking a lot lately about “rescission,” that is, when an insurance company cancels your medical coverage, even though premiums were paid. The Los Angeles Times reports that the House Subcommittee on Oversight and Investigations found that people with breast cancer and over a 1,000 other medical conditions were targeted for rescission.
An insurance company executive quoted in the article defends the rescissions, focusing on rising healthcare costs when policy holders lie about preexisting medical conditions. This may be true, but the three executives questioned by the committee wouldn’t agree to immediately limit rescissions to cases where intentional fraud could be proven. Along these lines, the LA Times also reports that California legislators are discussing laws to prohibit medical coverage cancellation unless policy holders made intentional misrepresentations.
It’s clear that insurance companies don’t always live up to their end of the bargain, but sometimes an insurance company’s actions go beyond just breach of contract when it has acted in bad faith. Your insurance company owes you a duty to act in good faith and deal fairly with you. For example, an insurance company may be acting in bad faith if it won’t offer you a reasonable settlement, unreasonably delays payment, takes an unreasonable amount of time to investigate your claim or does a poor job of investigating, or denies a legitimate claim. Just recently, the Arizona Daily Star reported Farmer’s Insurance settled a class action lawsuit for $3 million, in which the plaintiffs claimed the insurer had acted in bad faith.
Insurance is meant to protect you in case the unexpected happens, but if you believe your insurance company has acted in bad faith, contact our experienced attorneys to review your case. We’ll work to protect your rights and interests and hold your insurer to its obligations. Reach San Diego Law Firm by calling (619) 794-0243.
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