Every insurance claim ends with a number. The question a policyholder cannot answer alone is whether that number reflects what the policy actually owes.
Regulators answer it out loud once in a while. The California Department of Insurance went after State Farm General in May 2026, filing an Accusation and Order to Show Cause over claims from the January 2025 Los Angeles wildfires. Examiners looked at 220 of those claims. In 114 of them, they found violations of state law, 398 in total.
The department alleges that State Farm failed to begin investigations within 15 days, made unreasonably low settlement offers, and failed to provide required written denials for hygienist and environmental testing. State Farm policyholders filed roughly 11,300 residential claims from the fires, and the company rejects the allegations.
Survivors described the repeated reassignment of adjusters as “adjuster roulette,” and the department says adjusters were not assigned within the statutory timelines. Several of the alleged violations come down to missed dates, which is where the rules are easiest to read.
A Low Offer and Bad Faith Are Not the Same Thing
A date stamp can prove a missed deadline. A dollar figure takes more work. Estimates for the same roof can sit $11,000 apart with nobody acting in bad faith, and a gap like that is an amount-of-loss dispute. Most property policies have an appraisal clause to settle it without a lawsuit. Coverage questions fall outside appraisal, which only sets the dollar amount of a covered loss.
Bad faith turns on how the carrier handled the claim more than on how much it paid. A good-faith disagreement over the amount owed, backed by a fair investigation, is generally not bad faith, even if more is later found due. Conduct that can cross the line includes ignoring letters, taking too long to act on a proof of loss, failing to explain a decision, and making offers well below what the carrier’s own estimates support.
Policyholders with one disputed loss often need help telling the two situations apart. A Riverside bad faith insurance lawyer at Shaver Legal, APC, handles homeowner claim denials, commercial property claims, natural disaster claims, and delayed insurance payments as separate categories of work.
The First Offer Is a Number, Not a Verdict
An opening figure that is routine does not automatically signify bad faith. What matters more is how far the figure sits from the documented loss and whether the carrier can explain the difference. From there, the policyholder decides whether to let the figure stand or push further.
Insurance companies will offer settlement to resolve personal injury claims. But claimants do not have to automatically accept this amount of insurance settlement if this does not fairly cover the losses.
The Deadlines Are Written Down and Countable
California’s claims regulations give a carrier 15 calendar days to acknowledge a claim and start investigating. After it has proof of claim, it gets 40 calendar days at most to accept or deny. If that is not enough time, a written notice has to explain why, and the same notice goes out every 30 days until a decision is made. Payment follows within 30 calendar days of acceptance.
Ohio is tighter on the decision and payment deadlines. Under the Ohio Administrative Code, a claim must be acknowledged within 15 days and decided within 21 days after a proof of loss is received. If more time is needed, the insurer must say so in writing within those 21 days and update the claimant at least every 45 days. Payment is due within 10 days after acceptance when the amount is not in dispute.
Enforcement in this area usually starts with somebody counting those days on a calendar. Missed deadlines are the cheapest violations to prove, because they need no expert and no argument about what a shingle costs.
The Regulator and the Courtroom are Separate Doors
California’s claims regulations require a denial to be in writing and to state the specific reasons for it, so a generic letter that gives none does not meet the rule. If the claimant believes the claim was wrongfully denied, the letter must also say the matter can be reviewed by the Department of Insurance and give the address and telephone number of the unit that reviews claims practices. That gives a policyholder something concrete to check against the policy.
In many states, policyholders can pursue a disputed claim by making a complaint with the state regulator, filing a lawsuit, or selecting some other options like an appraisal or mediation. The options all vary in terms of procedures, costs, and results. In California, the unfair claims statute (Insurance Code section 790.03) does not create a private right to sue, and Ohio’s claims rule says the same, so lawsuits generally rest on the policy contract and common-law bad faith. Other states differ, and the state insurance department is the place to start. The NAIC, the national association of state insurance commissioners, links to each state’s department.
A broadly worded release deserves a careful read before it is signed, because it can end a policyholder’s right to claim for losses found after the settlement, such as hidden property damage. In California, Civil Code section 1542 keeps a general release from reaching claims the policyholder did not know about, unless the release expressly waives that protection. If the release includes the waiver, unknown claims are released as well.
Either door leads back to the claim file. California requires insurers to record the date they received, processed, and sent every material document and to keep files for the current year and the four years before it. Ohio requires an insurer to be able to reconstruct its handling of any claim and to keep closed-claim data for at least three years or until its next financial examination, whichever is longer. A complaint to the regulator and a lawsuit both start from that record.
