4 Ways to File a Complaint Against an Insurance Company in California

Is an insurance company not reimbursing you for the full amount of your claim? You have several options, including submitting a complaint to the California Department of Insurance. Just because an insurance company tells you they won't reimburse you for your costs, doesn't mean that they are legally correct.

Here are four ways to file a complaint against an insurance company in California:

• File a complaint with the California Department of Insurance

• Send the Insurance Company a Demand Letter

• File a complaint with the Better Business Bureau ("BBB")

• File a small claims court lawsuit

What is the California Department of Insurance?

The California Department of Insurance is a government agency that regulates insurance companies operating in California.

They issue insurance licenses, investigate consumer complaints, and enforce the rules that insurance companies have to follow.

What types of complaints does the California Department of Insurance handle?

The California Department of Insurance handles a broad range of complaints against insurance companies. Here are some examples:

• When an insurance company fails to reimburse you for a claim.

• When an insurance company fails to respond to you.

• When you think an insurance company is acting in bad faith.

• When you think an insurance company adjuster is giving you an unfair offer.

• When an insurance company has improperly denied your claim.

Remember, just because an insurance company has denied your claim doesn't mean that the insurance company acted legally.

Consumer Guides from the California Department of Insurance

The Department of Insurance has published guides for dealing with different types of insurance companies.

Here are some quick links to their guides:

• Auto Insurance

• Health Insurance

• Homeowners Insurance

• Life Insurance

• Pet Insurance

• Business Insurance

• Bail Bond Insurance

The Department of Insurance also publishes common laws and regulations that apply to disputes with insurance companies.

How to File a Complaint with the California Department of Insurance

Online:  CA Department of Insurance Complaint Form

You can also contact their consumer hotline for more information: 1-800-927-4357

The California Department of Insurance will investigate your complaint against the insurance company. They will review any supporting evidence you choose to upload and contact the insurance company for a response. Make sure you create an account on the Department of Insurance's website so you can follow the status of your complaint!  

What happens if the California Department of Insurance doesn't resolve your complaint against an insurance company? Consider sending a demand letter or suing in small claims court.

Continue Learning: Guide on how to sue an insurance company in small claims court.

A demand letter to an insurance company is a letter written to an insurance company outlining what happened and seeking reimbursement for what happened to you. For example, if you were in a car accident and your insurance company wasn't paying for the damage to your car, you would send your insurance company a demand letter requesting reimbursement for your costs to fix your car. The goal of the letter is to resolve the problem, otherwise, you will sue them.

Why should you send a demand letter?

1. In California small claims court, you are required to demand payment from an insurance company before suing them in small claims court. A demand letter is an effective way of completing this requirement.

2. A demand letter lets the insurance company know that you are serious about the problem and will take action if they don't resolve it before you file a lawsuit.

3. Sending a demand letter is cheaper and faster than filing a lawsuit, and it may lead to a resolution without filing a lawsuit.

What is the BBB?

The BBB is a non-profit that serves as an intermediary between insurance companies and consumers.

Reasons Why Some Insurance Companies Respond to BBB Complaints

• If the insurance company is accredited with the BBB and they doesn't respond to a BBB complaint, their accreditation may be revoked and the complaint becomes part of their BBB profile.

• If the insurance company is not accredited with the BBB, the complaint will become part of their BBB profile.

• BBB reviews provide other consumers with confidence when engaging with an insurance company. Insurance companies do not want negative BBB complaints.

What types of complaints against insurance companies does the BBB handle?

The BBB handles a broad range of complaints against insurance companies. Here are some examples:

• If your insurance company fails to pay after a car accident.

• If your insurance company denies a claim in bad faith.

• If your insurance company does not pay for all costs on a covered claim.

• The insurance company is overcharging you for the premiums.

• The insurance company did not reimburse you after you made payments to fix your car.

Continue Learning: Is it worth filing a complaint with the BBB?

1. Click here to go to the Better Business Bureau website.

2. Scroll to the bottom of the page and click the button “Start Your  Complaint.”

What to Expect Once you Submit your Complaint to the BBB

• The BBB will forward your complaint to the insurance company within 2 business days.

• The insurance company will be asked to respond within 14 days, and if a response is not received, a second request will be made.

• You will be notified of the insurance company’s response when the BBB receives it (or notified that they received no response).

• Complaints against insurance companies are usually closed within 30 business days.

What should you do if no agreement is reached after a BBB complaint? You may want to try suing the insurance company in a small claims court in California.

What types of lawsuits can be filed against an insurance company in small claims?

Lawsuits against insurance companies are very common in small claims courts. Many types of lawsuits can be filed against an insurance company, the most common ones are over:

• Failure to pay after a car accident.

• Bad faith denial of a claim.

• Failure to pay for all costs on a covered claim.

• Premium overcharges.

• Failure to reimburse for expenses after a car accident.  

• Failure to quickly pay a claim.

Small Claims Court Limits

To be able to file a small claims court lawsuit in California, you are capped at the amount you can sue for, also known as "small claims court limits." Generally, you can sue an insurance company for a maximum of $12,500 (unless you are suing on behalf of an LLC or Corporation, the maximum you can sue for is $6,250).

If you are owed more than the amount you can sue for, you can still sue for the maximum amount allowed, but you will need to waive any additional amount over the limit.

What are the California Small Claims Court Filing Fees?

The amount you will pay to file a small claims lawsuit in California depends on how much you are suing for. You will pay between $30 to $75 to file the lawsuit. If you cannot afford to pay court fees, you can ask the court to waive the fees.  

What are other costs for Small Claims Court?

In most small claims cases, you can expect to pay:

• Filing fees (see above) $30- $75

• Serving Costs can range from $0-$75 per person you sue.

If you win, you can request that the losing party pay for your court fees and serving costs.

• Do I need a lawyer to go to court? No, in fact, California does not allow lawyers to represent you at the initial small claims hearing.

• What are small claims hearings like in California? The hearings are quick and, on average, are 10-15 minutes.

• How long do small claims cases take? Most courts usually schedule the small claims hearing no later than 70 days from when the lawsuit is filed.

Learn more about suing an insurance company in a small claims court in California.