California Court Expands Policyholders’ Right to Sue Insurers

By Chris Rizo | July 7, 2011

  • July 7, 2011 at 1:46 pm
    BZ says:
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    As I said in my blog, Zalma on Insurance,

    “I am also concerned, as is Justice Woods, that the law of unintended consequences will come to the fore and hundreds of marginal or only superficially meritorious lawsuits will be filed. It will provide a great deal of work for plaintiffs and defense lawyers and will cure very little of the wrongs complained of by Hughes. Insurers, like Progressive, with a preferred provider system must train their personnel to advise their insureds in accordance with the law and not attempt to compel the insured to use the preferred provider.”

    Hopefully the Supreme Court will review this case and Zheng and keep the discipline of insurers in the Department of Insurance as required by Moradi Shalal.

  • July 7, 2011 at 4:27 pm
    Ron says:
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    Another politically-motivated decision on the part of Judge Carolyn Kuhl that has come back to bite her in the ass. Her and her husband, Judge Highberger, are quite the force to be reckoned with – isn’t there some kind of checks and balances system in the Los Angeles Superior Court that can rein in these two?

  • July 7, 2011 at 5:25 pm
    Al says:
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    From a state (Montana) with both 1st and 3rd party bad faith claims, experience is that the sky will not fall if consumers are able to actually hold insurers accountable; a preferable free market approach I’d think these capitalistic companies could relate too, or is it that the insurance industry prefers a state based socialistic approach where a state agency never has the staff or resources necessary to actually hold insurers accountable?

    • July 8, 2011 at 10:53 am
      Boyd says:
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      Al you are an uninformed reptile. Take a look at what is going on in FL right now…allowable 1st and 3rd party suits are rampant. Don’t kid yourself or any of us others – it is all about giving the plntf bar another avenue for revenue income (recovery of attnys fees and damages which they keep the majority of in a class action – then provide a $20 voucher to all the class members). This article talked about “alleged” issues – a phone operator steering – wrong if true and something the insurance dept fines a carrier for, and provides guidelines to correct. What occurs is the carrier can have a network and provide additional guarantees for work done as long as they don’t discourage a customer away from their own shop. The point is, there is a adequate avenue already in existence to address the issue. Clogging our courts with garbage designed truly to just line pockets of a few high profile plntf firms is just not a smart or responsible thing to do. If there is a pattern of behavior with enough complaints the IDP takes action. Issuing fines and suspensions is the way to enforce penalties vs. offenders, not providing self interested lawfirms with rights to trump up classes of folks for mainly trivial issues.

  • July 7, 2011 at 6:48 pm
    Snoopmeister says:
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    What is the giant sucking sound? It is the sound of companies writing less and less business in California.

    The legislature and executive are supposed to write the law and enforce it. The judicial branch has to simply interpret it. It should not legislate from the bench.

  • July 11, 2011 at 9:42 pm
    Kevin C. says:
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    This is excellent….more lawsuits for CA, just what we need. As if plummeting home prices aren’t enough, now companies can look forward to more specious litigation brought about by class action lawyers looking to cash in on CA’s increasing, sustained effort to drive every single business out of the state.

    Is it any wonder that states like Texas are clearing the clock of CA in terms of new job creation? And it’s no wonder that outsourcing jobs to other countries didn’t happen even sooner, with our increasingly negative business climate. Don’t look for that to change any time soon.

  • July 12, 2011 at 12:33 pm
    Jack Armstead says:
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    Wow… it amazes me how so few people really understand the issue. The Departments of Insurance (in all 50 states) are no more likely to resolve any complaints from consumers than they would sell lottery tickets to them. The Dept.’s of Insurance are full of insurance people and they don’t do anything. Just wait until you have your insurance company tell you that they have an “interest” in your repair and watch what happens then. If you can’t pick the place where you want your vehicle repaired… then you now own an HMP or a PPO for your car instead of an indemnification policy.

  • July 23, 2011 at 11:27 am
    mike says:
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    the professor’s “floodgate” comment reflects a bias towards activist judges. If the CA legislature wanted to excluded private civil actions when passing similar legislation the legislature could do that very easily. The floodgates issue is a public policy issue. The courts should not be the source of public policy; it should come from the legislature.

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