What counts as bad faith by an insurance company in California?
In California, an insurer commits bad faith when it withholds, delays, or underpays policy benefits without a reasonable basis. The most common patterns are: lowball estimates that ignore code upgrades and matching; denials issued before a real investigation; ignored supplements; misapplied exclusions; and forcing the insured to litigate to recover what the policy already owes.
The recurring bad faith patterns
California bad faith cases usually follow one of a small number of scripts. Recognizing the script early lets you document the record while it's still forming.
- Lowball Xactimate estimates missing scope, O&P, code upgrades, or matching
- Excessive depreciation on roofing, cabinetry, and personal property
- Denials issued without a site inspection or expert review
- Ignored contractor supplements and change orders
- Repeated demands for documentation the insured has already provided
- Adjuster reassignments that reset the file and restart the clock
- Written denials that cite no specific policy provision (violates 10 CCR §2695.7(b)(1))
- ACV-only payments where replacement cost coverage clearly applies
What isn't bad faith
A genuine coverage dispute — where both sides have a reasonable position — is not bad faith. The 'genuine dispute doctrine' protects carriers who investigate fairly and reach a defensible conclusion, even if a jury later disagrees. Bad faith is the absence of that fairness, not the presence of a disagreement.
Need the evidence organized?
We build the bad faith evidence file for California policyholders: correspondence log, line-item estimate comparison, §790.03 citation map, and an exhibit-ready binder. $95/hour, client-directed.
Open an evidence fileRelated questions
Educational information only. Legal Document Assistants provide evidence services under California Business & Professions Code §6400 et seq.; we do not provide legal advice.