What is the statute of limitations for bad faith insurance in California?
In California, the tort claim for insurance bad faith has a 2-year statute of limitations (CCP §339), and the breach of contract claim has a 4-year limit (CCP §337). But most first-party property policies also contain a contractual 'suit against the insurer' clause requiring suit within 1 year of inception of the loss — that clause is enforceable and is tolled only while the claim is being investigated (Prudential-LMI v. Superior Court (1990) 51 Cal.3d 674).
Which clock is running
The three clocks run independently. The 1-year policy suit clause is usually the tightest and the one that surprises insureds. It is tolled from the date of notice of loss until the carrier issues an unequivocal denial.
- 1 year — policy suit clause on most homeowner/property policies (tolled during investigation)
- 2 years — tort bad faith claim (CCP §339)
- 4 years — breach of written insurance contract (CCP §337)
Practical takeaway
If your claim has been open more than a few months without a clear resolution, calendar the 1-year date from the loss and confirm with a California attorney how much of that period was tolled. Waiting risks losing the contract claim entirely.
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