The White Waiver: When Your Insurance Company Asks You to Keep Settlement Talks Secret

Your insurance company has denied your claim or offered you far less than what you believe you’re owed. Maybe you’ve hired an attorney. Maybe you’ve filed suit. Now the insurance company contacts your side and says it’s willing to talk about settling the case — but only if you first sign an agreement. The agreement says that whatever the insurer offers you during settlement discussions cannot be used against the insurer later in court as evidence of bad faith.

This agreement is known as a White waiver, and it is one of the most consequential — and least understood — documents that an insured can be asked to sign. Named after a 1985 California Supreme Court decision, the White waiver has become a routine fixture in first-party insurance disputes. Whether you should sign one, and what happens if you do, are questions that every policyholder and every policyholder’s attorney should understand before the document ever lands on the table.

The Case That Started It All: White v. Western Title Insurance Co.

The White waiver takes its name from White v. Western Title Insurance Co. (1985) 40 Cal.3d 870, a landmark California Supreme Court decision that fundamentally changed the landscape of insurance bad faith litigation.

Brian and Helen White purchased a property in Mendocino County and obtained a title insurance policy from Western Title Insurance Company. What the insurer failed to disclose — despite the information being plainly available in the public record — was a recorded water easement held by River Estates Mutual Water Corporation. When the water company later asserted its rights, the Whites found themselves stuck with an encumbrance their title insurer should have caught.

The Whites sued for breach of contract, negligence, and breach of the implied covenant of good faith and fair dealing. The case went to a jury, which awarded $8,400 in contract and negligence damages and an additional $20,000 for breach of the good faith covenant.

What made this case a landmark was not the relatively modest dollar amounts. It was the California Supreme Court’s ruling on two critical issues.

First, the court held that the duty of good faith and fair dealing does not terminate when the insured files a lawsuit. Western Title had argued that once litigation began, the parties were adversaries and the insurer was free to litigate as aggressively as it chose, with no continuing obligation of good faith toward its own insured. The Supreme Court disagreed. The contractual relationship between an insurer and its insured, the court said, “does not end when litigation begins.” Creating a bright-line rule that good faith obligations evaporate upon the filing of suit, the court warned, would “encourage insurers to induce the early filing of suits, and to delay serious investigation” of claims.

Second, the court held that settlement offers made during litigation are admissible as evidence of bad faith — not to prove liability on the underlying claim, but to demonstrate how the insurer handled the claim. Evidence Code section 1152 generally bars the admission of settlement offers to prove liability for the loss being compromised. But the court distinguished between using a settlement offer to prove you owe a debt (which is prohibited) and using it to prove that the insurer acted in bad faith in how it handled the claim (which is permitted). The court drew on Fletcher v. Western National Life Ins. Co.(1970) 10 Cal.App.3d 376, which had established that settlement communications may be introduced “as an instrumentality of the tort” — not as proof of the underlying obligation, but as proof of bad faith conduct.

The facts of Whiteillustrated exactly the kind of insurer behavior this rule was designed to expose. Western Title denied coverage for a recorded easement without reasonable basis. It offered paltry settlement amounts — $3,000 and then $5,000 — without ever conducting an appraisal of the plaintiff’s loss. Even after the court found in the Whites’ favor on the liability question, the insurer made no serious attempt to settle. The “entire pattern of conduct,” the court found, demonstrated an attempt to avoid responsibility for obvious coverage failures.

The dissent — Justices Lucas and Kaus — warned that this rule would chill insurers’ willingness to make settlement offers, because any offer could later be paraded before a jury as evidence of inadequacy. The majority acknowledged this concern but concluded that the duty of good faith was more important than the insurer’s desire to negotiate in secrecy.

What the Insurance Industry Did Next

The insurance industry’s response to Whitewas swift and predictable. If settlement offers could be used as evidence of bad faith, then insurers would simply condition settlement talks on the insured’s agreement not to use them that way. The White waiver was born.

A typical White waiver asks the insured (or the insured’s attorney) to agree that:

• All settlement discussions, offers, and counteroffers will remain confidential.
• Neither party will introduce settlement communications as evidence in any subsequent proceeding.
• The waiver specifically extends to any claim for breach of the implied covenant of good faith and fair dealing.

In other words, the insured is being asked to voluntarily surrender the very right that the California Supreme Court recognized in White: the right to show a jury what the insurer offered, and to argue that the offer was so unreasonable that it constituted bad faith.

Should an Insured Sign a White Waiver?

The answer is: it depends — but the default position should be caution, not compliance.

When It Might Make Sense

If negotiations have been amicable and productive, if the adjuster has demonstrated a reasonable attitude toward the claim, and if there are genuine signals that the insurer is prepared to make a meaningful offer, a carefully limited White waiver can facilitate a resolution. Sometimes the insurer’s claims department genuinely wants to settle but needs the institutional cover of knowing that a settlement number that doesn’t ultimately work out won’t be used to punish them later. In these situations, a White waiver can actually lubricate negotiations that might otherwise stall.

As one attorney has put it, if the insurer shows “signs of making a significant move up on prior settlement offers,” there may be reason to take the leap of faith.

When It Doesn’t

If the insurer refuses to discuss settlement at all unless a White waiver is signed, that refusal itself should raise concerns. An insurer that conditions all communication on secrecy may be signaling that it intends to make an offer it knows is unreasonable — and it wants to ensure that the unreasonableness of that offer can never see the inside of a courtroom.

If the relationship between the insured and the insurer is already acrimonious — if there is a history of delays, lowball offers, or outright denials — then signing away the right to use settlement conduct as evidence is signing away one of the most powerful tools available in a bad faith case. In these situations, as the Barnes & Thornburg policyholder practice has noted, “mistrust between insurer and policyholder may be at a level where this leap of faith is impossible.”

There is also a broader strategic concern. The White waiver effectively allows the insurer to make an unreasonably low offer and then walk away from the table, knowing the insured can never point to that offer as evidence of bad faith. It can be used as a mechanism to create a paper trail that looks like the insurer tried to settle — “We made an offer!” — while the substance of that offer is shielded from scrutiny. Defense counsel can later argue that the insurer acted reasonably by engaging in settlement discussions, while the plaintiff is barred from revealing what those discussions actually looked like.

Time Limits: A Critical Safeguard

One of the most important — and most frequently overlooked — issues with White waivers is duration. Many waivers, as drafted by defense counsel, contain no expiration date. If the insured signs an open-ended White waiver, the insurer’s settlement conduct may be shielded from scrutiny indefinitely — not just for the current round of negotiations, but for all future settlement discussions in the case.

An insured who agrees to a White waiver should insist on a defined time period. The waiver should cover a specific settlement conference, a specific mediation session, or a specific window of days. When that period expires, the insured’s rights under Whiteshould fully restore. If the insurer wants another round of protected discussions, it can request a new waiver — and the insured can decide at that point whether the insurer’s conduct warrants continued trust.

A White waiver that “carries on in perpetuity,” as Merlin Law Group’s Chip Merlin has cautioned, can trap an insured in a cycle of lowball offers with no accountability. The insured remains locked in what appears to be a negotiation but is in reality a delay tactic, and the waiver prevents the insured from ever telling a jury what the insurer was actually willing to put on the table.

Can an Insured Revoke a White Waiver?

This is a more complex question than it might appear, and the answer depends on how the waiver is structured and what consideration, if any, supported it.

The Consideration Problem

Under basic contract law, a waiver is a form of agreement, and agreements generally require consideration — something of value exchanged by both parties. If the insurer’s only “consideration” for the White waiver is its willingness to talk about settlement, a court could question whether that constitutes adequate consideration. The insurer already has a duty of good faith that extends through litigation, as Whiteitself established. Conditioning the performance of an existing duty on the insured’s surrender of rights raises questions about whether the agreement was truly bargained for or was simply extracted under the threat of silence.

Rescission Under California Civil Code Section 1689

California Civil Code section 1689 provides several grounds on which a party may rescind a contract:

• Duress or undue influence: If the insured was pressured into signing without adequate time to consider the waiver’s implications, the agreement may be voidable.
• Failure of consideration: If the insurer obtained the waiver by promising to engage in good-faith negotiations and then proceeded to make only token or unreasonable offers, the consideration underlying the waiver has arguably failed.
• Mutual consent: Both parties can agree to rescind the waiver at any time.

The practical difficulty is that rescission typically requires prompt action. An insured who signs a White waiver, participates in months of settlement discussions, and then attempts to rescind the waiver after learning the offers were inadequate may face arguments that the right to rescind was waived by continued participation.

This is another reason why time limits are critical. A waiver with a built-in expiration is far easier to manage than one that requires affirmative revocation.

Breaking the Confidentiality: When the White Waiver May Not Hold

The White waiver is not an impenetrable shield. There are several circumstances under which the confidentiality it provides can be pierced or circumvented.

Third-Party Witnesses

A White waiver is a contract between two parties: the insurer and the insured (or their respective counsel). It binds the signatories. It does not — and cannot — bind third parties who are not parties to the agreement.

If a settlement discussion takes place in the presence of a third party — a public adjuster, a contractor, a family member, an appraiser — that third party is not bound by the White waiver. The insured may be contractually barred from testifying about what was said, but the third party is not. A subpoena directed to the third party could potentially elicit the very testimony the waiver was designed to suppress.

This creates a practical consideration for both sides. Insurers who want the protection of a White waiver should be aware that the presence of non-signatory witnesses can undermine it. Insureds and their counsel, conversely, should think carefully about who is in the room when settlement discussions occur. If a public adjuster or other professional is present during the discussion and does not sign the waiver, that person’s observations may remain available as evidence.

Communications Outside the Scope of the Waiver

A White waiver typically covers “settlement discussions” or “settlement communications.” But not every communication between an insurer and an insured during a dispute qualifies as a settlement discussion. If the insurer makes statements about the claim, the coverage, or the investigation that are not framed as settlement offers, those statements may fall outside the waiver’s protection.

The distinction drawn in Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137 is instructive, even though that case dealt with mediation confidentiality rather than White waivers specifically. In Wimsatt, the court held that a settlement conversation that occurred during a phone call to schedule depositions was not protected by mediation confidentiality because it was “routine discussion, unassociated with mediation that routinely occurs in civil litigation.” The principle translates: conversations that happen to occur around the time of settlement discussions but are not themselves settlement communications may not be covered by the waiver.

The Fraud, Duress, and Illegality Exception

Even in the context of formal mediation — where confidentiality protections are statutory rather than contractual — California Evidence Code section 1123(d) provides that a mediation agreement is admissible if used “to show fraud, duress, or illegality that is relevant to an issue in dispute.”

If the insurer engaged in fraud or duress in connection with the White waiver itself — for example, by making affirmative misrepresentations about its intentions to induce the insured to sign — the waiver may be challenged on those grounds. An insurer that tells the insured “we’re prepared to make a very substantial offer” to induce execution of the waiver, and then tables an offer that is clearly inadequate, may have created grounds for the insured to argue that the waiver was procured by fraud and should be set aside.

The Insurer’s Own Conduct

There is an argument — not yet definitively resolved by the courts — that an insurer cannot use a White waiver both as a shield and as a sword. If the insurer introduces evidence of its settlement efforts to demonstrate good faith (for example, by telling the jury “we tried to settle this case”), the insured should be entitled to rebut that evidence by showing what the settlement efforts actually looked like. The waiver was designed to keep settlement discussions out of the courtroom. If the insurer selectively introduces settlement-related evidence, it may open the door to the insured doing the same.

The Last-Minute White Waiver: Pressure Without Time to Think

One of the more troubling scenarios occurs when the insurer presents the White waiver at the last possible moment — at the start of a mediation session, at a settlement conference, or during a phone call where the insured is told that an offer is waiting but cannot be disclosed until the waiver is signed. The insured is placed in a position of having to make a consequential legal decision on the spot, without the opportunity to consult with counsel or to consider the implications.

This kind of pressure implicates the doctrine of undue influence, which California courts have addressed extensively. In Odorizzi v. Bloomfield School District (1966) 246 Cal.App.2d 123, the California Court of Appeal identified several hallmarks of undue influence, including:

• Discussion of the transaction at an unusual or inappropriate time
• Insistent demand that the business be finished at once
• Extreme emphasis on the untoward consequences of delay
• Statements that there is no time to consult an attorney
• The absence of third-party advisors to the party being asked to sign
• Use of multiple persuaders against a single party

If an insurer presents a White waiver under circumstances that check several of these boxes — demanding immediate signature, discouraging consultation with counsel, suggesting that the offer will disappear if the waiver isn’t signed right now — the insured may have grounds to challenge the waiver as the product of undue influence, rendering it voidable under California Civil Code section 1689.

From the insurer’s perspective, this is a risky tactic for a different reason: it looks terrible. An insurer that pressures a policyholder into signing a confidentiality agreement without adequate time for review is creating exactly the kind of evidence that fuels a bad faith case. Even if the waiver holds, the manner in which it was obtained — the timing, the pressure, the refusal to allow counsel review — may itself become evidence of the insurer’s overall bad faith in handling the claim.

Promises Made Alongside the White Waiver

Sometimes the White waiver does not arrive alone. It arrives with assurances. The adjuster or defense counsel tells the insured or the insured’s attorney: “Sign this, and we’re going to make you a very fair offer.” “We’ve gotten authority to move significantly from our previous position.” “This is just a formality — we’re very close to resolving this.”

These representations matter, and they can change the legal calculus in two ways.

Promissory Estoppel

Under California law, promissory estoppel requires: (1) a clear and unambiguous promise; (2) reliance by the party to whom the promise was made; (3) the reliance was both reasonable and foreseeable; and (4) the party asserting estoppel was injured by the reliance. (See Tomerlin v. Canadian Indem. Co. (1964) 61 Cal.2d 638, 649, applying promissory estoppel in the insurance context.)

If the insurer makes specific representations about the offer it intends to make — and those representations induce the insured to sign the White waiver — the insured may argue that the insurer should be estopped from enforcing the waiver when the actual offer bore no resemblance to what was promised. The insured relied on the promise, signed the waiver in reliance on that promise, and was injured when the promise turned out to be hollow.

Failure of Consideration

If the insurer’s implicit promise is “sign this waiver and we will negotiate in good faith,” and the insurer then proceeds to table a patently unreasonable offer with no intention of meaningful negotiation, the consideration for the waiver has arguably failed. The insured did not sign the waiver in exchange for nothing — the insured signed it in exchange for a genuine settlement effort. When that effort never materializes, the basis for the agreement collapses.

The Defense Perspective

It would be incomplete to discuss White waivers without acknowledging the legitimate concerns that motivated their creation.

From the insurer’s standpoint, the Whitedecision created an asymmetry. An insurer that makes a settlement offer takes on risk: if the offer is later characterized as “lowball,” it becomes evidence of bad faith. But an insurer that refuses to negotiate at all — that simply digs in and fights the case to verdict — faces no such exposure, because there are no settlement offers to scrutinize. The perverse incentive, the defense bar argues, is for insurers not to negotiate, which harms policyholders who might otherwise receive prompt payment.

The White waiver, in this view, is a mechanism that encourages settlement by creating a safe space for negotiation. Without it, insurers may be reluctant to make offers at all, for fear that any number they put on the table will be used against them if the case doesn’t resolve.

There is some merit to this argument. Settlement discussions are generally most productive when both sides can speak candidly without fear that their positions will be used against them. Evidence Code section 1152 reflects this policy for ordinary litigation. The White waiver extends that protection to the specific context where White carved out an exception.

Defense counsel would also point out that the White waiver is a voluntary agreement. No one is forced to sign it. The insured can decline, and the insurer can decline to negotiate without one. The parties are free to reach whatever arrangement suits them, and the waiver is simply one term of the negotiation framework.

The Plaintiff Perspective

Plaintiff-side attorneys see the White waiver differently — and with good reason.

The whole point of the Whitedecision was to hold insurers accountable for how they treat their policyholders during the claims process, including during litigation. The duty of good faith doesn’t stop at the courthouse door. When an insurer offers $5,000 to settle a $500,000 claim, that offer tells the jury something important about how the insurer approached its obligations. Allowing insurers to routinely shield that information behind a pre-signed waiver effectively nullifies the White holding by private agreement.

Plaintiff attorneys also note that the “voluntary” nature of the White waiver is often illusory. When an insured has been fighting with their insurance company for months or years, has mounting legal bills, and is told that the insurer will only discuss settlement if a waiver is signed, the power imbalance is significant. The insured needs a resolution. The insurer can wait indefinitely. Calling this a voluntary agreement between equals ignores the reality of the relationship.

The concern is compounded when the White waiver is used in the pre-litigation context — before the insured has even filed suit. An insured who hasn’t yet retained counsel may not understand what rights they’re surrendering. They may not know what White v. Western Titleheld, or why the right to introduce settlement offers matters. They may sign the waiver thinking it’s a routine formality, never realizing that they’ve given up one of the most important pieces of evidence they could present in a bad faith case.

The Statutory Framework

Understanding the White waiver requires understanding the statutory provisions it interacts with.

Evidence Code Section 1152(a) establishes the general rule: evidence that a person has offered to compromise a claim is inadmissible to prove liability for the loss or damage at issue.

Evidence Code Section 1152(b)carves out the insurance bad faith exception. It expressly permits evidence of settlement offers in actions for breach of the covenant of good faith and fair dealing or for violations of Insurance Code section 790.03(h) — the Unfair Claims Settlement Practices Act. This is the codification of the principle the White court recognized: that settlement conduct is relevant to how the insurer handled the claim, distinct from whether the insurer is liable on the underlying policy.

When a settlement offer is admitted under the bad faith exception, section 1152(b) also provides that — at the request of either party — evidence of any other offer or counteroffer to compromise the same claim shall also be admissible. This prevents cherry-picking: if one offer comes in, all offers come in, giving the jury the complete picture.

Evidence Code Sections 1115–1128govern mediation confidentiality. Section 1119 provides broad protection for communications made “for the purpose of, in the course of, or pursuant to, a mediation.” This is a statutory protection, not a contractual one, and it is in some respects more robust than a White waiver. However, as the court noted in Wimsatt v. Superior Court(2007) 152 Cal.App.4th 137, communications that occur in “the regular course of litigation” — even during the same time period as a mediation — may not qualify for mediation confidentiality. And section 1123(d) expressly provides that mediation agreements are admissible when used to show “fraud, duress, or illegality.”

Insurance Code Section 790.03(h) defines unfair claims settlement practices, including failing to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. This statute provides an independent basis for admitting evidence of settlement conduct, regardless of any White waiver.

Practical Guidance for Policyholders

If you are presented with a White waiver — whether you are represented by counsel or not — consider the following:

4. Understand what you’re giving up.The right to introduce settlement offers as evidence of bad faith is not a minor procedural right. It can be the difference between a case that settles for policy limits and a case that the insurer fights to verdict. Surrendering that right should be a deliberate, informed decision — not a formality.

5. Consider who else is in the room. If your public adjuster, contractor, or other professional is present during settlement discussions, they are not bound by a White waiver they did not sign. Their observations may remain available as evidence regardless of the waiver.

Conclusion

The White waiver occupies an uncomfortable space in California insurance law. It is a private contractual mechanism designed to override a public judicial holding — a workaround that allows insurers to negotiate without the accountability that the California Supreme Court said they owe their policyholders.

That does not mean a White waiver is always inappropriate. There are circumstances where it can facilitate genuine, good-faith settlement discussions. But those circumstances require an insurer that is actually committed to resolving the claim fairly, and an insured who is making an informed, uncoerced decision to participate on those terms.

Too often, the White waiver is used as something else entirely: a tool to extract concessions from policyholders who don’t fully understand what they’re signing, a shield that allows the insurer to make offers it knows are inadequate without fear of accountability, and a mechanism that converts the appearance of settlement activity into a defense against the very bad faith claims that the settlement activity should have prevented.

Policyholders and their counsel should approach the White waiver with the same scrutiny they would apply to any other term the insurer proposes. Read it. Negotiate it. Limit it. And if the circumstances don’t warrant it, decline it.

Key Cases Cited

• White v. Western Title Insurance Co. (1985) 40 Cal.3d 870, 710 P.2d 309
• Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376
• Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654
• Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137
• Cassel v. Superior Court (2011) 51 Cal.4th 113
• Odorizzi v. Bloomfield School District (1966) 246 Cal.App.2d 123
• Tomerlin v. Canadian Indem. Co. (1964) 61 Cal.2d 638

Key Statutes

• California Evidence Code section 1152
• California Evidence Code sections 1115–1128
• California Civil Code section 1689
• California Insurance Code section 790.03(h)

Sources and Further Reading

• Chip Merlin, “The Origin of ‘White Waiver’ in California” — Property Insurance Coverage Law Blog (Merlin Law Group)
• Chip Merlin, “Should Policyholders Sign a ‘White Waiver’ Agreement?” — Property Insurance Coverage Law Blog (Merlin Law Group)
• Scott M. Seaman, “Insurer Asks for a White Waiver as a Condition to Talking Settlement. Should You Do It?” — Barnes & Thornburg Policyholder Protection Blog
• CKB Vienna LLP, “Waivers in Connection with Insurance Settlement Offers”
• Kalfen Law Corp, “White Waiver — Insurance Law”
• “Mediation Confidentiality and Insurance Bad Faith” — Plaintiff Magazine

This article is for informational purposes only and does not constitute legal advice. Insurance law varies by jurisdiction, and the analysis above focuses on California law. Consult with a licensed attorney before making decisions about signing or declining a White waiver in your specific case.