Bad Faith of Insurers in California Too many people who have paid premiums to an insurance company for years receive an unpleasant surprise when they file a claim under their policies: the previous friendliness and the The insurer's accommodating attitude gives rise to suspicion, avoidance and even threats. And it all happens at the very moment when the loss that caused the accident is adding stress and anxiety to the lives of policyholders. Insurers' Duty of “Good Faith” California has been a leader in recognizing this power imbalance between insurance companies and their customers, and in rectifying it. Every insurance policy is believed to include a provision that the insurer will act in good faith and deal fairly with the insured. If the insurance company violates this duty, it commits a "tort" of bad faith. This duty of good faith applies to all actions of the insurer throughout the entire claims management process, including the decision on whether to cover the claim and the amount to pay. the left. The fact that insurers cannot act in bad faith provides policyholders with some protection, as long as they are wi...