What were the basic facts and issues in Hodjat v. State Farm Mutual Automobile?

California civil litigation attorney and law professor Ivo Labar explains how he represented an insured owner of a BMW and win against an insurance company.

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In Hodjat, the insureds put in an insurance claim for a loss to an automobile, a BMW, and they claimed the BMW was in very good condition and it suffered a total loss. When the insurance company was investigating the claim they noted very many inconsistencies in the statements made regarding the purchase and condition of the automobile and they ultimately denied coverage for the loss under the theory that the insureds were misrepresenting and being fraudulent in their representations to the insurance company. The Court of Appeal affirmed that denial of the insureds’ subsequent bad faith claim on the basis that there were material misrepresentations during the claim adjustment process. The lesson of Hodjat is that insureds need to be truthful and honest during the adjustment of the claim and cooperate with their insurance company.