Bad Faith Insurance in California: What Homeowners Need to Know

Insurance companies have legal duties in California. When they delay or deny valid claims without cause, it may be bad faith. Learn your rights and how to respond.

Bad Faith Insurance in California: What Homeowners Need to Know

By Jasmine Daya, Esq. – Geraci LLP

Your homeowners insurance policy is more than a contract — it’s a promise. And under California law, insurers must handle claims with good faith and fair dealing. When they don’t, you may be entitled to more than just your original claim amount.

This is what we call insurance bad faith — and you have rights.

What is insurance bad faith?

Bad faith happens when an insurance company:

• Delays payment without justification

• Denies a valid claim without a proper investigation

• Fails to communicate or respond in a timely manner

• Lowballs your settlement offer with no reasonable basis

• Misrepresents your policy coverage

• Forces you into litigation to receive what you’re owed

In California, these actions violate both statutory law and common law duties — and they can result in your insurer being liable for additional damages, including emotional distress, attorney’s fees, and in extreme cases, punitive damages.

Common examples in property damage claims:

• Claim is denied with no inspection

• You get bounced between adjusters for months

• You’re told your smoke, wind, or roof damage “doesn’t qualify” despite clear evidence

• Insurer pressures you into accepting a low offer immediately after disaster

What to do if you suspect bad faith

1. Document everything: calls, emails, adjuster notes

2. Keep all correspondence in one place

3. Ask for written reasons for delays or denials

4. Request your claim file — in California, you’re entitled to it

5. Call a property insurance attorney to review your case

Why bad faith matters

A simple denial might be fixable. But bad faith behavior opens the door to legal damages beyond your original claim — and it holds insurance companies accountable for predatory practices. Geraci LLP helps clients take that next step when insurers cross the line.

Don’t let them get away with it

If your property damage claim has been mishandled, you may be entitled to far more than your policy limits. Let us assess your case for free and determine whether your insurer acted in bad faith.