Legal Question in Insurance Law in California

Currently, I have lawsuit going on with a Insurance company who denied my coverage for a long period of time. When Insurance company was served with lawsuit documents, Insurance company showed to the court that bills were paid one day before the initiation of the lawsuit. Court overrule their demurrer. Breach of Contract, Bad Faith and fraud is alleged. My question is does fraud make the case unlimited? Damages from breach of contract were around $10,000 so I filed limited case. Bad faith requires that the benefits be withheld and without proper cause. Insurance company is willing to compromise and pay money for the dismissal of the lawsuit. However, the amount is only for bad faith not fraud. I want to know the right amount for settlement and if the case changes to unlimited ?


Asked on 11/24/15, 11:07 am

1 Answer from Attorneys

You do not count punitive damages for fraud or for bad faith in calculating the amount in controversy. So the only fraud damages you count are the direct consequence of the fraud, i.e., what money did you lose by relying on a false statement or other misrepresentation by the defendant. The only bad faith damages you count are the unpaid benefits you were entitled to and did not receive.

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Answered on 11/24/15, 11:50 am


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