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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: 

Silberg v. California Life Insurance

  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
  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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