Insurance Company Faces Contract Dispute

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Friday, December 4, 2015.

Many times, when questioned, contracts come down to a matter of interpretation. This is especially true since the nature of legal language lends itself to a certain amount of subjectivity. This is why many companies in California will, at some point, find themselves facing breach of contract lawsuits. One insurance company has recently found itself embroiled in one such contract dispute.

State Farm Insurance is now facing a lawsuit filed by a policyholder following a car accident that occurred in early July 2012. The lawsuit was filed by a man and his wife in late October of this year. The plaintiffs are asking the court to force the insurance company to cover damages sustained in the vehicle crash.

The lawsuit essentially centers around interpretation of whether the legal language in the insurance contract disqualifies the plaintiffs from being able to receive benefits. Following the filing of the insurance claim to cover fees related to the car accident, State Farm Insurance realized that the claimant was not qualified due to an inaccuracy in the claimant's income and employment report. Now the plaintiff is taking the matter to court and is asking for the court to award $50,000 in damages.

The defendant insurance company will now have the opportunity to defend itself against the breach of contract allegations. Just like in any contract dispute in California, the judge will make the ultimate decision as to whether the company will prevail. However, a broad understanding of the law, as well as knowledge of the exact applicable statutes and case law, will be crucial to a strong legal argument in court.

Source:, "Couple sues State Farm Insurance alleging breach of contract", Carrie Bradon, December 1, 2015

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