What is an extracontractual claim?

An extracontractual claim, or bad faith claim, is a claim made in California that falls outside of the terms of an insurance policy. It is typically used when an insurance company denies or delays a claim that it had a duty or obligation to honor or pay out. In California, an extracontractual claim can be filed against an insurance company if it behaves in one of the following malicious ways: if it fails to investigate and pay a claim in a timely manner; if it refuses to accept or investigate a valid claim; or if it breaches the implied covenant of good faith and fair dealing. An example of this would be if an insurance company refuses to pay a valid claim without a reasonable basis, or if it attempts to limit its liability by failing to investigate the claim fully. When a person or business files a claim and is denied or delayed without a reasonable explanation, they may be able to file an extracontractual claim and seek compensation. This type of claim is unique to California, and each state has its own laws and regulations surrounding extracontractual claims.

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What is an extracontractual claim?

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