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3 U. San Fernando Valley L. Rev. 127 (1974)
To Protect You From the Medical Bills That Can Ruin You - Silberg v. California Life Insurance Company

handle is hein.journals/sfernvlr3 and id is 279 raw text is: TO PROTECT YOU FROM THE MEDICAL BILLS THAT CAN RUIN YOU- Silberg v. California Life Insurance Company Through the purchase of insurance policies we seek to protect ourselves against fire, theft, major medical loss, public liability, disability, loss of income and accidental death. Insurance has replaced the savings account as the primary source of financial security from unexpected loss. Sometimes the insurance company does not make prompt and good faith efforts to satisfy claims. What remedy does the policy-holder have if he is wrongfully denied or withheld his benefits? In some states there are statutes which assess penalties for a percentage of the damages and attorneys' fees for vexatious refusals to pay claims.' A vexatious refusal is not founded upon what appears to be the facts, but rather on a possibility that later investigation may develop facts justifying refusal to pay. For those states which have no statutory provisions, the policy-holder could only hope to obtain the amount of benefits due him under the contract but no additional damages caused by delay in payment. As a result the insurance company would have no risk of additional liability by delaying payment for two or three years to the severe detriment or even ruin of the policy-holder. For the first time, in Silberg v. California Life Insurance Company,2 the California Supreme Court ruled on a jury verdict which had decided that an insurance company had unreasonably denied a claim for benefits, assessing both general and punitive damages against said company. The insurance company raised an alleged defense that it did not single the policy-holder out for bad faith treatment, but rather that its interpretation of the policy and denial of the claim would have been standard procedure in the insurance industry. The California Supreme Court, in a near unanimous decision, with only one recently appointed justice dissenting, affirmed compensatory damages of $75,- 000 for failure of the insurance company to pay $4,900 in medical benefits. The Court also warned that punitive damages would apply in the proper case, and 1. For statutes in other states See: 44 Am. Jur.2d, Ins. Section 1797. 2. 11 Cal.3d 452, - Cal. Rptr. - (1974).

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