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Bad Faith Insurance Tactics: When Your Insurance Company Won’t Pay

Frank Penney • February 25, 2025

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Dealing with an insurance company after a car accident can be frustrating, especially if they delay or deny your rightful claim. While insurance companies are supposed to help you recover after an accident, some use bad faith tactics to minimize payouts or avoid paying altogether. If you’re facing this situation, it’s crucial to understand your rights and how to fight back.

What Is Insurance Bad Faith?

Insurance companies in California are legally required to act in good faith when handling claims. This means they must fairly investigate, process, and settle claims in a reasonable time frame. Bad faith insurance practices occur when an insurer unreasonably denies, delays, or underpays a legitimate claim.

Under California law (California Insurance Code § 790.03), insurance companies must not engage in unfair or deceptive practices. If they do, they can be held liable for bad faith insurance practices, allowing victims to sue for compensation beyond their initial claim.

Common Bad Faith Insurance Tactics

If your insurance company is ignoring, delaying, or undervaluing your claim, they may be acting in bad faith. Here are some red flags to watch out for:

1. Unreasonable Claim Denial

Insurance companies sometimes deny valid claims without a clear explanation. They might claim:

The accident was your fault (even with evidence proving otherwise)
Your injuries weren’t caused by the crash
Your policy doesn’t cover the damages (when it actually does)

2. Delaying the Claim Process

Insurance companies often use stall tactics to pressure claimants into giving up or accepting a lower settlement. Delays may include:

Ignoring your calls and emails
Taking months to review documents
Repeatedly requesting unnecessary paperwork

3. Offering a Lowball Settlement

A common tactic is to offer a settlement that doesn’t cover your medical bills, lost wages, or pain and suffering. If the amount seems too low, it probably is.

4. Misrepresenting Policy Coverage

Some insurers misinterpret or misrepresent policy terms to avoid paying. They may claim you don’t have coverage for certain injuries or damages, even when you do.

5. Refusing to Investigate the Claim

Insurance companies are legally required to conduct a proper investigation before denying a claim. If they dismiss your case without reviewing all evidence, they could be acting in bad faith.

What to Do If Your Insurance Company Acts in Bad Faith

If you suspect bad faith tactics, don’t let the insurance company take advantage of you. Take these steps:

1. Document Everything

Keep records of all communication with your insurer, including emails, letters, and claim-related documents. Take notes of phone calls, including the date, time, and what was discussed.

2. Know Your Policy

Read your insurance policy carefully to understand what is covered. If your insurer misrepresents your coverage, you’ll have proof to challenge them.

3. Send a Demand Letter

A formal demand letter outlines your claim, the evidence supporting it, and the insurer’s bad faith behavior. This can sometimes push them to settle fairly.

4. Contact a Personal Injury Attorney

If your insurance company refuses to cooperate, an experienced California personal injury attorney can take legal action. You may be entitled to compensation beyond your initial claim, including punitive damages for bad faith.

How a Lawyer Can Help You Fight Insurance Bad Faith

An experienced personal injury lawyer will:

Review your claim and identify bad faith tactics
Negotiate with the insurer for a fair settlement
File a lawsuit if necessary to recover additional compensation

At Frank Penney Injury Law, we have a proven track record of holding insurance companies accountable. If your insurer is acting in bad faith, we’ll fight to get you the compensation you deserve. If your insurance company is delaying, denying, or undervaluing your car accident claim, you don’t have to fight alone. Contact Frank Penney Injury Law today for a free consultation. With over 25 years of experience, we’ve recovered $500 million for our clients and won cases against major insurance companies.

You Can Bank on Frank!

The information provided on this blog is for general informational purposes only and does not constitute legal advice. The content presented is not tailored to any specific case or set of facts and should not be relied upon as a substitute for professional legal counsel. Every personal injury case is unique and requires an individualized assessment by a qualified attorney.

We strongly encourage you to consult with a competent attorney to address your specific legal needs and circumstances. This blog makes no guarantees regarding the accuracy, completeness, or relevance of the information provided, and we disclaim any liability for actions taken or not taken based on the content herein.

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