Avoiding Charges of Bad Faith
The basic test in bad faith cases is whether the insurer has unreasonably and “without proper cause” refused to compensate the insured for a loss covered by the policy. Gruenberg v. Aetna Insurance Co., 9 Cal. 3d 566, 108 Cal. Rptr. 480. The adjuster should not attempt to adjust a claim, or even contact an insured, until he or she knows everything necessary to protect the rights of the insurer without doing anything to injure the right of the insured to receive the benefits of the policy. The adjuster must investigate all claims fully and thoroughly.
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