Insurance Claim Denied, Delayed, or Reduced?

Insurance Claim Denied, Delayed, or Reduced?

Video Transcript:

Richard Richardson:

The attorney will be able to advise you on how long your statutory periods are and your deadlines to file your claim, the correct procedure in filing your claim, as well as the possibilities of prevailing on the claim.

Rob Rosenthal:

Do you know what insurance bad faith is and how you get help if you've suffered from it? Well, that's what we're going to find out today because we're going to ask the lawyer.

Hi again, everybody. I'm Rob Rosenthal with askthelawyers.com and my guest is California attorney Richard Richardson. Richard, good to see you. Thank you so much for making some time to help us out today.

Richard Richardson:

Good to be here, Rob.

Rob Rosenthal:

Let's just start at the beginning. What does the legal term “insurance bad faith” even mean?

Richard Richardson:

Insurance bad faith is when an insurance carrier doesn't fulfill its obligation to the client. Oftentimes it doesn't fulfill that obligation with the sort of intention to withhold premiums that it has taken, but the policy doesn't pay out the policy to the plaintiff when the policy is due to the plaintiff. It may use tactics such as delaying payment, not fully investigating payment, using individuals to undervalue the claim of the insured; these are all different tactics that have been used in the past by insurance carriers to avoid paying out the policy. So these classify as insurance bad faith when there are certain duties that are breached and they're breached in such a manner that show that it’s a plan or a scheme to avoid paying the policy to the insured. Because when you have an accident, an insurance company is supposed to be there to take care of you, to help; there's a special duty. And when they breach that duty and it shows a scheme of not wanting to make you whole or pay you in accordance with your agreement, that's when insurance bad faith comes in.

Rob Rosenthal:

And can you tell us a little bit about your experience representing people for these types of claims?

Richard Richardson.

Sure. My experience goes back as far as seven or eight years in representing people with insurance bad faith claims. Now, oftentimes, insurance battles can take different forms; it can take a homeowner's insurance policy, an auto insurance policy, or it could take a fire-related policy, and I've had experience in all areas. When you get an insurance bad case claim, sometimes people don't know what their rights are and they don't know how to pursue their rights. They know that they may have a homeowner's insurance policy, and low and behold something happened to their house, there is a fire or there was a break in at their house, but when they applied a claim to their insurance carrier, it doesn't get paid. Not only does it not get paid, but there's a delay in the investigation, or there's a denial to cover the claim. Those are all categories of insurance bad faith.

Rob Rosenthal:

It would seem to me, Richard, that in those kinds of situations, the insurance company isn't going to say, “Oh, we're operating in bad faith.” They're going to have what seems to a layman like a good reason. They're going to give you what seems like a good excuse. So then we, the laymen, need someone like yourself who can recognize when there is bad faith.

Richard Richardson:

Sure. And a lot of the times the case law of what's happened in previous dealings with a consumer and the insurance carrier determine what’s considered insurance bad faith. When you go through these scenarios with an insurance carrier, a typical person does not know the complete list of what their duties are and what their rights are under the policy. They don't know that they're entitled to have the policy investigated in a reasonable amount of time. They don't know that they're entitled to an independent evaluation from subcontractors independent from the insurance agents. They don't understand that they're entitled to receive the benefits of their policy without encountering some sort of scheme that makes them file a claim or file a lawsuit in order to get to the complete benefits. They don't understand that sometimes their claim can be undervalued because the insurance carrier deals with this every day all day, and they know different ways to undervalue your claim. You also want to understand, as a typical consumer, that there's a very short statute of limitations that you have in order to fight this action by your insurance carrier that you may deem unfair. So that's why reaching out to a civil litigation attorney, reaching out to an attorney who's experienced in insurance bad faith, will help you. The attorney will be able to advise you on how long your statutory periods are on your deadlines to file your claim, the correct procedure in filing your claim, as well as the possibilities of prevailing on your claim.

Rob Rosenthal:

In your experience, Richard, have you noticed that some insurance carriers purposely target people in minority communities for bad faith?

Richard Richardson:

I've seen it happen consistently. And oftentimes it may be related to class in income, if you're middle class, lower middle class, you may not have the ability to pay $5,000 or $10,000 to go to an attorney and get a complete review of your insurance coverage. Whereas if you live in Beverly Hills, you live in Palos Verdes, you may have the ability to do that. And so, insurance carriers are less likely to deny coverage for an arbitrary reason if you live on the higher income of that spectrum. Whereas if you're a lower middle class, you may not know your rights and you may not have the ability to seek it out. Especially, let's say, in African-American communities, I've seen in the past where their insurance companies that are smaller mid-tier companies, they've been cited by the Insurance Commissioner of the State of California for engaging in unfair practices in African American homeowners communities, such as Bayview Hunters Point, or South Central Los Angeles. I've taken cases in both places, and from my experience, I've been able to look at the insurance company, the insurance commissioner's website, and find when these companies have incited. I've been able to look and find consumer reports from online media such as Yelp Reviews to find this company is not only doing that in one or two scenarios, there are ten different reports that they've done this in African-American communities. And based on that I'm able to put together a viable claim against them for violating mandatory insurance carrier duties.

Rob Rosenthal:

So when someone decides to speak to a civil attorney like yourself about this insurance bad faith, do they need to worry about the attorney's fees eating up any claim they may have? Where is the worth? And what do they need to be prepared to do?

Richard Richardson:

It depends on the nature of your situation. But sometimes plaintiffs’ attorneys can take cases on a contingency fee basis depending on the value of your case. Initially, attorneys such as myself, we don't charge a fee to do an initial consultation. So I'm able to evaluate your claim to look at any police reports or incident reports or fire reports that you completed, and do an evaluation for you without charging. And based on collecting that information and based on my history, I'm able to tell you whether you have a viable claim, as well as statutory deadlines for pursuing the claim. So in that scenario, you wouldn’t need to worry about money upfront. Sometimes you're able to engage in a contingency fee basis with the attorney, an arrangement that allows the attorney to cover the fees, pending the attorney being reimbursed at the end of the case; the case in such as a mediation, a settlement, or a verdict after trial in the plaintiff's favor. Those are all different arrangements that allow plaintiffs’ attorneys to work with people who may not have the means to pay the attorney's fees up front.

Rob Rosenthal:

It sounds like getting someone like yourself involved as early in the process as possible is a good idea, because if they delay, delay, delay, and they wait until, “Well, I’ve just had it.” They may have run out of a statute of limitations.

Richard Richardson:

That's correct. And people will be surprised to learn that in certain insurance policies the statute of limitations could be as short as one year. And in that scenario, your ability to sue would be forever barred, meaning that if you fail to fail a lawsuit within one year—you were thinking about it, you didn't know your rights, you wait, you had other issues going on—you could forever lose your right pursue a claim against the insurance carrier when you knew it was unfair what they did to you, you just didn't know how to receive help. This is why reaching out to an attorney, reaching out to an attorney early, and making sure your documentation is in order and presented to the attorney can help you make yourself whole and change the future of your interaction with the insurance carrier.

Rob Rosenthal:

That's going to do it for this episode of Ask the Lawyer. My guest has been California attorney Richard Richardson. Remember, if you need the very best information or you like the idea of being able to choose a lawyer that lawyers choose, make sure to go to askthelawyers.com. Thanks for watching, everybody. I'm Rob Rosenthal with AskTheLawyers™.

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