The key issue in insurance bad faith litigation is whether the claims professional reasonably handled the claim.
Throughout the claims-handling process, the claims professional should constantly ask him-or-herself whether the investigation is sufficient to support a coverage determination and how someone might challenge that determination.
By asking and answering those questions, the claims professional can be confident in his or her coverage determination.
And to ensure that the claims professional’s analysis is not lost, his or her file should contain the evidence necessary to fully explain any such determination.
Recently, the California Court of Appeal addressed issues involving the adequacy of the insurer’s investigation in a first-party property case. Fadeeff v. State Farm Gen. Ins. Co., 50 Cal. App. 5th 94 (2020). The insureds’ home was damaged by a wildfire.