When insurance companies act in bad faith, it can cause serious financial harm to individuals, families, and businesses. When this happens, policyholders can file a claim against their insurance company to recover damages for its failure. A Riverside bad-faith insurance lawyer can help you secure the financial recovery you need.
It can be incredibly frustrating when insurance companies don’t uphold their side of a contract. At Shaver Legal, APC, we help policyholders like you navigate unfair tactics that prevent you from getting support for a legitimate claim. We have substantial experience with the tactics that insurance companies use, and we know when those tactics become bad-faith actions.
Bad-faith insurance occurs when an insurance company you are in contract with acts unreasonably, unethically, and even illegally, with the intent to avoid paying you a full and fair claim that you are owed under your insurance policy. Insurance companies have a responsibility to act in good faith, and they can be held accountable when they fail to do so.
It is not bad faith if an insurance company makes a mistake, but it is if it violates its duty to engage fairly with policyholders. Bad-faith dealings lead to policyholders being shouldered with financial burden, while insurance companies make significant profit, like when insurers profited $400 million after Hurricane Sandy in 2012.
Many natural disasters affect Riverside and communities throughout California. This includes wildfires like the Airport fire in Riverside County in 2024 and the Palisades fire that affected Los Angeles and Ventura Counties in 2025.
In February 2025, the most recent wildfires in California were estimated to cost $164 billion in property and capital loss. By February, $6.9 billion had been dispersed in fire insurance claims. In July of the same year, $20.4 billion of those costs had been paid through claims.
When there are large-scale damages like wildfires, insurance companies are especially likely to try to undermine and underpay claims.
California law lists some of the following unfair methods of business in insurance:
The state law also lists several actions that become bad-faith when they are done knowingly or happen frequently enough to be considered the company’s business practice. This includes:
In a successful claim against an insurance company for bad faith, you can recover the payout you should have received for your claim and other damages. The initial payout for your claim could include the costs to repair or replace any personal, home, or business property that was damaged or destroyed.
The compensation should cover any losses you suffered because of the bad-faith actions of the insurance company, which may include:
Hire a bad-faith insurance lawyer today.
Bad-faith insurance law in California can be found in the Insurance Code (INS) 790.03 and INS 790.034. It covers the numerous ways that insurance companies can act unreasonably or even illegally when addressing a claim by a policyholder and breaching the contract that the company agreed to.
The law covers several actions, such as misrepresenting a policy to induce a policyholder to lapse on coverage, lying or misleading about the business of insurance, or engaging in insurance monopolies.
Section 791 of the California Insurance Code addresses privacy and protection of insurance information. It ensures that insurance companies use certain standards when collecting, using, and disclosing information in transactions.
The purpose is to ensure that insurance companies can get the information they need for their business while also protecting individuals, policyholders, and the rest of the public from intrusive and unfair information collection. Insurance companies have more leeway if they are investigating a reasonable belief of fraud.
There are multiple ways that an insurer can be liable for bad faith, with some of the most common being that 1) an insurer knowingly delays a claim for an unreasonable amount of time outside the legal requirements for a response or payment, 2) an insurer purposefully gives you a low settlement offer that fails to match your policy despite you showing proof of damages, or 3) an insurer denies your legitimate claim without cause or investigation.
Section 22 of the California Insurance Code defines what insurance is. The law states that it is a legal contract that a policyholder enters into to ensure compensation from the insurance company in the event of loss, liability, or damage from an event. This event may be unknown or specified.
Let us be your last line of defense. Contact Shaver Legal, APC, for a free consultation today.
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