What is required for an insurance company to act in good faith?

In California, insurance companies have a legal obligation to act in “good faith” when handling claims. This means that they must treat their customers fairly and honestly, without trying to take advantage of them. To demonstrate good faith, insurance companies must investigate and evaluate each claim thoroughly and objectively. They must take reasonable steps to get information relevant to the claim. They must explain clearly why they deny or reduce the claim, and must not delay processing a claim without good reason. Insurance companies must also respond to claims in a timely manner and allow customers to appeal denials. Under California law, insurers must reply to claims within 15 days of receiving them and must evaluate appeals within 30 days. When handling claims, insurance companies must treat customers with courtesy and respect. They must also make sure that customers understand their legal rights and keep them informed of any progress on their claim. Overall, insurance companies must be fair and honest towards their customers, investigate claims carefully, explain their decisions clearly and promptly, and follow the laws and regulations of California. By doing these things, companies demonstrate good faith towards their customers, and meet the standards of California law.

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