(USA Herald) – Insurance policies are meant to provide protection and peace of mind to policyholders in the event of an accident or loss. However, in California, the practice of time-limited insurance policy limit demands has become a sledgehammer in the litigation toolbox, potentially leading to bad faith practices by insurance carriers. To address these issues, the California Legislature has enacted crucial changes, that took effect on January 1, 2023, to regulate the use of time-limited demands within policy limits for settling civil claims.
Senate Bill 1155, or California Code of Civil Procedure sections 999-999.5, sets forth the statutory requirements for the use of time-limited demands in automobile, motor vehicle, homeowner, and commercial premises liability insurance policies for claims related to property damage, personal injury, and wrongful death.
According to California resident and USA Herald reporter, Samuel Lopez, a time-limited demand is defined as “an offer prior to the filing of the complaint or demand for arbitration to settle any cause of action or a claim for personal injury, property damage, bodily injury, or wrongful death made by or on behalf of a claimant to a tortfeasor with a liability insurance policy for purposes of settling the claim against the tortfeasor within the insurer’s limit of liability insurance, which by its terms must be accepted within a specified period of time.”