Recovering Damages In California Insurance Lawsuits

In this general discussion we’ll explore what is meant by “recovering damages” in a civil lawsuit, the full extent of which can only be determined on a case by case analysis by experienced lawyers. Please contact our law office if you have further questions about recovering damages in a bad faith or serious personal injury case.

Types of Recoverable Damages

As a general proposition a person or entity wishing to recover damages cannot get monetary compensation in a civil lawsuit unless they can prove their damages.  This is not always as straight forward as it sounds.  It can be difficult and expensive, but proving damages is the heart of the case.  Without proving damages the case has no value and the plaintiff and/or insured cannot get a recovery.

In an insurance bad faith case an insured is entitled to the following categories of recoverable damages.

1. Contract damages – the benefits owed under the insurance policy.

Such damages depend on the type of insurance policy that is in issue.  If it is a homeowners policy, such damages can include: the cost to repair any covered damage under the policy; personal property if there is contents coverage; alternative living expenses if the home is unlivable because of covered damage; and so on, depending on the loss and the type of policy.

Viau & Kwasniewski bad faith lawyers recently handled a homeowner case where the upper story of the home was severely damaged by fire.  The insurance company prepared a scope and estimate in which the insurance company only offered 40% of the true cost to repair the home. To prove damages, a contractor expert had to be hired to prepare an accurate scope and estimate for the insured; this was key to the successful outcome of the lawsuit.  The contractor expert hired by the insured spent about 12 hours in the home taking extensive measurements and numerous photographs to document his work.  He then prepared a detailed and accurate scope and estimate to repair the home.  The insurance company had their retained expert also inspect the house; but, the carrier’s expert only spent about 45 minutes in the home, and did little other than look around and take a few photographs.  We also hired a videographer to videotape the entire inspection of the insurance company contractor expert.  The issue surrounding the insured’s contractor expert involved significant effort and expense, and was important contributor to the excellent result that was obtained for the insured in recovering damages.

In small business claims regarding damaged inventory, experts often are needed to assess the value of the inventory, and extent of loss.

In cases involving lost profits that are covered under a CGL policy, experts/accountants may be needed to prove lost profits.

In any case involving the carriers’ refusal to pay policy benefits (which is a refusal to pay contract damages); an analysis of the contract damages is important.  It often entails significant client involvement, working as a partner with the representing bad faith lawyer, to make sure all covered contract benefits are identified.

2.Tort DamagesAll damages caused by the insurance company’s unreasonable handling of the claim, whether the damages could have been anticipated or not.

One of the important aspects of recovering damages in a California insurance bad faith case is that if the insurance company has unreasonably handled the insured’s claim, the insured may be entitled to all damages suffered caused by the insurance company’s bad faith.  This is in addition to the contract damages discussed above.  These are extra-contractual damages, also called “tort damages.”

Tort damages may include emotional distress, medical expenses from health problems either caused or aggravated by the stress of the insurance company’s bad faith conduct, lost financial opportunity, attorney fees, litigation costs, loss of income, and so on.  If damages can be identified, shown to have been caused by the insurance company bad faith, and quantified by admissible evidence, the damage – even if unforeseeable – may be recoverable.

3. Punitive DamagesDamages awarded to punish a conscious disregard of the rights or safety of the insured.

Generally speaking, in any case where punitive damages are sought in California, the plaintiff or insured must prove a conscious disregard for the rights and safety of the aggrieved party by clear and convincing evidence.  If the case is against an insurance company or a corporation, the conduct must have been approved or ratified by a managing agent of the entity.  In the case of an insurance company, approval may be inferred if the conduct has occurred in other claims, or if the conduct appears to be part of a pattern and practice of bad faith claims handling.

Punitive damages are not compensatory damages.  The public policy purpose for punitive damages is that they are to punish – to make an example of and to discourage despicable conduct.  The amount of the award is based on, among other factors, the egregiousness of the conduct and the amount of the compensatory damage award, and the wealth of the defendant.

Punitive damages are almost always requested in the prayer for damages in a bad faith complaint.  Insurance companies almost always file motions for summary adjudication before the trial to request the judge to dismiss the request for punitive damages.  If the bad faith lawyers for the insured, through investigation and discovery, have obtained admissible evidence demonstrating a conscious disregard of the rights of the insured which was approved and/or ratified by a managing agent of the insurance company, these motions are usually denied.  The question of punitive damages may then go to the jury for their determination as to whether punitive damages are appropriate, and if so, the amount of any punitive damage award.  If the punitive damages award by a jury is determined to be excessive, the judge can reduce punitive damages.  If the trial court does not reduce the punitive damage award, the defendant will most likely file an appeal.
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The above is a very general discussion of recoverable damages, and only includes some examples.  The full extent of damages recoverable in any case can only be determined on a case by case analysis by experienced lawyers

Bad Faith Lawyers Viau & Kwasniewski

Insurance coverage dispute and bad faith lawyers Viau & Kwasniewski, are experts in California insurance law. The principal lawyers have worked on and understand both sides of insurance litigation in bad faith matters.

Formerly representing major insurance and Fortune 500 companies they now provide this unique experience base to you; representing individual and small business policyholders who have been victimized by insurance company abuse.

In California, if an insurance company fails to deal fairly and act in “good faith”, as required by California law, policyholders have a legitimate basis to enlist the services of bad faith lawyers and file a lawsuit, suing for breach of contract and for breach of the covenant of good faith and fair dealing.
As experts in insurance law and litigation they Viau & Kwasniewski bad faith lawyers also handle wrongful death, products liability and personal injury cases.

Viau & Kwasniewski aggressively litigate, prosecute and successfully take cases to trial. They work for the policyholder to recover contract damages, tort damages and punitive damages, including out of pocket costs, attorney fees and other damages resulting from the bad faith conduct. Recovering damages may also include compensation for the emotional distress suffered as a result of the insurer’s bad faith conduct.

If you are a victim of insurance company abuse in California and require the assistance of experienced bad faith attorneys and experts in insurance law, or if you have more questions about recovering damages, contact our Los Angeles law firm VK Lawyers Toll Free at 1-833-633-1095, send an email to gkk@vklawyers.com , or complete our online Contact Us Form.