Under the case law culminating in Johansen v. California State Automobile Association, it is virtually impossible for an insurance carrier to reject a demand to settle within the policy limits and avoid liability for any excess judgment. The author explains this unannounced policy of strict liability and proposes a method of dealing with the problems created by such increased plaintiff leverage.
Johansen v. California State Automobile Association: Has California Adopted Strict Liability for an Insurer's Failure to Settle,
27 Hastings L.J. 895
Available at: https://repository.uchastings.edu/hastings_law_journal/vol27/iss4/5