What is the difference between breach of contract and bad faith insurance claims?

The difference between breach of contract and bad faith insurance claims is important to understand in California. Breach of contract occurs when either party in an agreement fails to fulfill their obligations according to the terms of the contract. This can be intentional or unintentional, and it can happen on either the part of the insured or the insurer. Bad faith insurance claims occur when an insurance company fails to act in the best interests of their customer or policyholder. This includes denying a claim without proper cause or not adequately investigating a claim to determine if coverage is due. In breach of contract, the damages are usually limited to the amount of compensation that should have been paid out in the contract, while bad faith insurance claims can involve punitive damages. Punitive damages are intended to punish a company for its actions and to deter the company from engaging in similar behavior in the future. In California, the punitive damages in a bad faith insurance claim can reach up to three times the amount of compensatory damages. Both of these concepts are important to keep in mind when dealing with insurance litigation in California. It is important to understand not only the rights of the insured but also the obligations of the insurer. This way, you can ensure that you are getting a fair deal from your insurance company, and holding them accountable if they violate the terms of the contract.

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What is the difference between breach of contract and bad faith insurance claims?

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