Under California law, policyholders who successfully prove an insurer acted in bad faith are eligible to recover several types of damages that extend beyond the original policy benefits. These include:

• Compensatory Damages: This is the baseline recovery, which includes the original policy benefits wrongfully withheld plus any loss of use, such as legal interest.
• Consequential Damages: These cover additional, foreseeable losses resulting from the breach. Examples include business interruption losses, extra living expenses, or other economic ripple effects.
• Emotional Distress Damages: Because bad faith is considered a tortious breach in California, policyholders may recover damages for the emotional harm caused by the insurer’s misconduct.
• Punitive Damages: In cases involving egregious conduct, a court may award punitive damages to punish the insurer. To qualify, there must be clear and convincing evidence of malice, oppression, or fraud as defined by California Civil Code § 3294.
• Attorney Fees and Costs: Under the ruling in Brandt v. Superior Court, policyholders may recover the attorney fees incurred to obtain the policy benefits and pursue the bad faith claim itself.

Because the recovery depends on the specific facts of the case, it is important to document all financial and emotional impacts caused by the insurer’s unreasonable denial or delay.