California Civil Code Section 999 Quiz

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What action must an insurer take if they do not accept a demand according to CCP §999.3?

Notify the claimant of its decision orally

Accept the demand within three days

Notify the claimant in writing of its decision (correct)

Provide an explanation after the demand expires

What criteria must a demand meet to be considered a reasonable offer to settle?

It should be addressed only to the insurance representative.

It must substantially comply with CCP §999.1-5. (correct)

It must comply with the material terms in CCP §999.1 only.

It must be sent to the Department of Insurance directly.

Which types of claims does CCP §999.5 apply to?

Claims related to commercial disputes

Automobile and wrongful death claims among others (correct)

Only personal injury claims

Medical malpractice claims exclusively

What must be included in a time-limited demand according to CCP §999.1?

A description of all known injuries Signup and view all the answers

What is the insurer allowed to request during the time to accept a demand?

Clarification or additional information Signup and view all the answers

What is the minimum time period for accepting a time-limited demand by email, fax, or certified mail?

30 days Signup and view all the answers

Which of the following statements is true regarding extracontractual damages?

They are any amount exceeding the policy limit of liability insurance. Signup and view all the answers

Which designation should be included in a policy limit demand to comply with CCP §999.1?

Time-Limited Demand Signup and view all the answers

Which of the following is NOT a required material term in a time-limited demand under CCP §999.1?

List of all witnesses to the incident Signup and view all the answers

What liability does an insurer face if it fails to accept a reasonable settlement offer within policy limits?

Liability extends to the entire judgment against the insured. Signup and view all the answers

What happens if an insurer fails to accept a reasonable settlement offer in terms of protecting the insured?

It exposes the insured to liability beyond coverage. Signup and view all the answers

What is one factor that should NOT be included in evaluating a reasonable settlement demand?

The adjuster's level of expertise. Signup and view all the answers

In what circumstance would an insurer likely face legal consequences regarding policy limits?

If a reasonable settlement offer is ignored. Signup and view all the answers

CCP §999 section does not apply to a claimant that is not represented by counsel.

True Signup and view all the answers

We can still open the policy and claim extracontractual damages from a defendant even if our policy limit demand did not comply with CCP $999.

False Signup and view all the answers

Study Notes

California Civil Code of Procedure (CCP) Section 999

CCP Section 999 governs "time-limited demands" for settling claims prior to filing a lawsuit.
A time-limited demand is an offer to settle a claim (e.g., personal injury, property damage) before a formal complaint or arbitration is initiated.
The offer must be within the policy limits of the liability insurance policy.
The offer must be presented with a specific timeframe for acceptance (e.g., a time-limited period).

Effective Policy Limits Demands

Demands must fulfill specific criteria to be considered valid before a court rules on bad faith rejection by an insurer.
The demand must be clear and precise in its terms.
All claimants must join in the settlement demand.
All involved insureds must release their claims upon settlement.
The settlement amount must be reasonable and within the policy limits.
The timing of the demand must provide adequate time for the insurer to properly investigate the claim.

Case Examples (CCP §999)

Hedayati v. AAA (2018): An insurance company failed to properly consider settlement demands because they lacked required forms and a reasonable response period.
Pinto v. Farmers (2017): Demands for settlement must be timely, consider liability clarity, comparative liability and co-defendants. The appropriateness and feasibility must be considered. Timely responses and essential information must be considered for settlement demand.
Rappaport v. Underinsurance Exchange (2007): Insurers have a duty to accept reasonable settlement offers to protect their insureds from liability exceeding coverage.

CCP § 999.1 (Demand Requirements)

Demands must be in writing, labeled "Time-Limited Demand," and follow specific material terms (e.g., timeframe for acceptance, claim details, etc.).
The demand must include proof of claim with attachments when required(e.g. medical records, bills to support a personal injury claim).

CCP § 999.2 (Demand Submission)

Demands must be sent to the liability insurer's designated email address or physical address (provided to the Department of Insurance). The insurance representative for the claim can also receive the demand.
The Department of Insurance publicly lists the addresses.

CCP § 999.3 (Insurer Response)

The insurer has the option to accept a time-limited demand in writing.
If the insurer rejects, the insurer must provide an explanation of their basis for rejection and notify the claimant in writing before the deadline for that particular demand. A rejection, or lack of acceptance, is useful in future bad faith lawsuits.

CCP § 999.4 (Substantial Compliance)

A demand that doesn't comply with the requirements generally won't be considered a reasonable offer to settle in subsequent bad faith litigation.
The section doesn’t apply to unrepresented claimants.

CCP § 999.5 (Applicable Types of Claims)

This section applies to claims arising from auto, motor vehicle, homeowner, or commercial liability policies for property damage, personal injury, and wrongful death.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on California Civil Code of Procedure Section 999, which covers time-limited demands for settling claims before litigation. This quiz focuses on the requirements for such demands, including the necessity for clarity, timing, and reasonableness of settlement offers within policy limits.