Automobile crashes are consistently a top cause of accidental injuries in our region. According to the California Highway Patrol (CHP), approximately 269,000 people are hurt in motor vehicle collisions statewide each year. Following a crash, injured victims need full and fair compensation for their damages, including things like vehicle repairs, medical bills, lost wages, and pain and suffering.
California law obligates insurance companies to handle claims in a just manner. There are especially strict regulations in place for first-party claims—meaning a claim through your own insurer. In this article, our Stockton auto accident attorney provides an in-depth overview of the most important things that you should know about California’s Fair Claims Settlement Practices Regulations.
An Overview of the California Fair Claims Settlement Practices Regulations
- The Purpose of the Law
The California Fair Claims Settlement Act is a set of regulations that is designed to promote fair and equitable practices in the insurance industry. The law’s primary purpose is to set standards for how insurers handle, process, and settle insurance claims in the state. These regulations ensure that policyholders receive accurate information and prompt, fair treatment when filing a claim. A first-party insurance company that violates its obligations under the California Fair Claims Settlement Practices Regulations may be liable not just for the full value of the initial legal claim, but also for additional bad faith insurance damages.
- You Have a Right to Know Your Coverage and Benefits
One key aspect of the California Fair Claims Settlement Practices Regulations is the policyholder’s right to understand their insurance coverage and benefits. You should never be in the dark about what your coverage is, what benefits are available, what timeline applies, and what you need to do to file a claim. According to the state law, insurers are obligated to provide clear, concise information about the policyholder’s coverage and the process of filing a claim. Among other things, first-party insurance providers in California must always be prepared to disclose the following:
- Types of losses covered;
- The amount of coverage;
- Any deductibles or copays;
- Any deadlines that apply; and
- The reasons for accepting or denying a claim.
- Insurers Must Follow State-Mandated Timeline
What happens when you file an insurance claim after a car accident in California? Can the insurance company just bury your file at the bottom of the pile? The answer is a clear and resounding “no”—the law sets strict deadlines that insurers must follow when adjudicating a claim. Here are some of the key deadlines to be aware of under the California Fair Claims Settlement Act:
- Insurance companies have 15 days to acknowledge the receipt of a claim. They should clearly inform the policyholder that they have received the claim details;
- Insurance has 40 days to accept or deny the claim. The 40 day deadline can be extended with proper notice in certain circumstances.
- Once a claim has been accepted by the insurance company, a payment must be made to the policyholder within 30 days. Prompt payment of valid claims is a must.
These deadlines are crucial in ensuring prompt response and resolution of insurance claims, mitigating potential financial hardship for policyholders. If you believe that an insurance carrier has breached the applicable deadline in a first-party car accident claim, please do not hesitate to contact our Stockton attorneys for immediate help.
- First-Party Insurers Cannot Lowball Policyholder
Another significant protection offered by the California Fair Claims Settlement Practices Regulations is against ‘lowballing’ by first-party insurers. Lowballing refers to the practice of offering a settlement amount significantly lower than what the claim is worth. Under these regulations, insurers are prohibited from misrepresenting facts or policy provisions to reduce benefits.
They are also mandated to adopt and implement standards for the prompt investigation and processing of claims, and must not persist in seeking information not reasonably required for or material to the resolution of a claim dispute. It is a legal protection designed to ensure that policyholders receive fair compensation in line with their coverage, discouraging manipulative practices in the industry.
Of course, that is not to say that insurers always actually offer full and fair car accident settlement offers in practice. They try to do anything that they can to limit the value of claims. Following a serious crash in Stockton, CA, it is imperative that you have a top-rated attorney on your side.
You May Also Have a Car Accident Injury Claim Against a Third Party
California is an at-fault motor vehicle accident state. The party deemed to be “at fault” for a crash can be held legally responsible for the resulting damages. Following a crash in Stockton, you may have a claim against a third party and/or their insurance provider. For example, imagine that another driver ran a red light and slammed into your vehicle in Downtown Stockton. You can bring a claim against them and their insurance carrier to seek compensation for your damages, including for vehicle repairs, lost wages, medical expenses, and pain and suffering.
A claim against another driver’s (or other party’s) insurance company is known as a third party claim. There are bad faith insurance laws in place that prohibit third party insurers from using bad faith settlement practices. At the same time, third party insurers can be especially challenging to deal with after a serious car accident. You do not have to take them on alone. A top-rated Stockton auto accident attorney will protect your legal rights and financial interests.
Set Up a Free Case Review With a Top Stockton, CA Auto Accident Lawyer
At Redkey Gordon Law Corp, our Stockton car crash attorneys are standing by, ready to fight for justice. If you have any questions about California’s Fair Claims Settlement Practices Regulations, we are here as a legal resource. Call us now or connect with us online to arrange your no fee, no obligation case review. We represent car accident victims in Stockton and throughout the surrounding communities, including in San Joaquin County.