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Seatback Failures
Front occupant seatbacks play a vital safety role in rear-end crashes, similar to the purpose of airbags and seatbelts in frontal impacts. In a rear impact, a front seat should be designed to absorb energy and contain the occupant in the front seating space. Weak, defective front seats can fail, collapse and cause front occupants […]
Allstate Taking $50,000 Bad Faith Claim to Supreme Court
An interesting case has taken place in Pennsylvania, where an individual transferred his rights in a bad faith claim against an insurance company to another individual. As the claim was against Allstate, it is fighting accountability, saying that the allowance for bad faith claims to be assigned in such manner has the potential to create windfalls for plaintiffs. In actuality, it simply gets the injury fully compensated and discourages insurance companies, like Allstate, from making low-ball, absurd offers and forcing injury victims into litigation.
All of this is a result of an accident which occurred in 2007. Jared Wolfe suffered soft tissue damage in an accident when another individual, under the influence of drugs and alcohol, struck his car. The individual driving was insured by Allstate for a $50,000 limit.
Wolfe requested $25,000 in damages to cover his medical costs (well within Allstate’s policy limits), but Allstate refused and counter-offered $1,200. Wolfe filed a suit against the driver for damages. After hearing the evidence, the jury awarded him $15,000 in compensatory and $50,000 in punitive damages. Allstate paid the $15k, but refused to pay the $50,000 because the driver’s policy does not cover punitive damages. In other words, Allstate completely ignored what was in its insured’s best interest when it forced this claim into litigation.
The driver assigned all his rights in the matter over to Wolfe, who was then able to file an insurance bad faith claim against Allstate. After hearing the evidence, the jury in the new case again awarded Wolfe the $50,000 award. Allstate in true “Delay, Deny, Defend” form of course appealed. The Pennsylvania Supreme Court will determine if such an assignment is allowed under Pennsylvania law.
Allstate is arguing that allowing anyone other than the policyholder to file an insurance bad faith claim will start to shift towards “overcompensating” for injuries. Allstate’s protestations ring a little hollow when you consider the details of the current case. Allstate is refusing to pay out an amount that was within the policyholder’s original limits; which was twice awarded to the injured party by two separate juries. It is difficult to see how Allstate can make its argument with a straight face. Allstate completely ignored what was in the best interest of its insured, i.e., Allstate’s insured faced punitive damages for driving under the influence, when it made a low-ball offer of $1,200 to an injury victim with a legitimate claim. Allstate also ignored an offer that was half of its insured’s policy limits. After all these years and the “outing” of its McKinsey documents, Allstate amazingly continues to follow its corporate policy of “profit over people.” Fairly compensating injury victims and taking into consideration what is in the best interest of the insured over Allstate making money is not “overcompensating injured plaintiffs.” It is doing what Allstate should have done in the first place.
If you ever have issues or problems dealing with insurance companies, do not hesitate to get in touch with a skilled insurance bad faith attorney today.
Nationwide Fighting $18 Million Judgment in Bad Faith Case
Nationwide Mutual Insurance Co. was recently found guilty of insurance bad faith practices and ordered to pay $18 million in punitive damages.
The lawsuit, which took place over several years, involved a couple who was given an improperly-repaired Jeep Cherokee, which later on proved defective, causing an accident. There were no serious injuries or fatalities, but not only was the couple put into direct danger by the insurance company’s actions, but they Nationwide took extensive and repeated steps to hide evidence and facts.
Nationwide is appealing the decision, but in the initial ruling, the judge agreed with the plaintiffs that the insurance company’s actions were reprehensible and illegal by almost every definition.
Part of the reason that the judge awarded $18 million in damages is because of the excessive distance Nationwide went in order to fight the claim. The cost to replace the Jeep in the first place would have been just $25,000, but Nationwide pushed for the improperly-performed repairs, and then spent over $3 million delaying it in court. There were dozens of points along the road where Nationwide could have owned up and settled, but because they fought so aggressively, the judge took no pity on them.
According to the judge, Jeffrey K. Sprecher, “fortunately, no one was killed or injured; but Nationwide knew there could be a subsequent accident when it permitted the vehicle to be returned with hidden structural repair failures. This, by definition, is a reckless indifference to its insured. Nationwide was willing to risk the Bergs’ lives to save itself money on a collision claim.”
The entire point of insurance policies is to protect common citizens from expensive one-time accidents, and they serve a valid function, but when an insurance company specifically puts your family into harm’s way in order to save a small amount of money, is there any stone you wouldn’t turn to obtain justice?
Luckily, you always have legal recourse. With an experienced attorney on your side, you can make sure that every step is taken to protect the ones you love.
Source: http://www.insurancejournal.com/news/east/2014/07/14/334530.htm
How to Deal With Insurance Adjustors
Although bad faith lawsuits are extremley complex, the concept of insurance bad faith is a simple one: When you sign up for an insurance policy, there is a reasonable expectation that your insurance company will conduct itself with “good faith and fair dealing.” In Arizona, your insurance company is bound to refrain from any action which would impair the benefits to which its insured had a right to expect from the insurance policy.
One thing to keep in mind is that Arizona does not recognize true “third party” bad faith so you only have these protections against your own insurance company’s unfair claims handling.
While it is not unusual for individuals to disagree with adjustors about how much their claim is worth, bad faith only really comes into play when you notice that an adjustor is dodging any questions or concerns about why a claim is worth what they say, or if they are unexpectedly denying your claims without any reasonable basis. If your adjuster is ignoring evidence that should have been included in the proper, fair evaluation of the claim, this could be bad faith claims handling practicies.
When this happens, it is never a good idea to mention the term “bad faith” in conversation with the insurance agent or adjustor or to threaten bad faith. If you do so, the insurance company will argue that you “set it up” for bad faith even if that is absolutely false. Instead, you should simply make sure that you document and confirm every conversation in writing. Do not give the insurance company any excuses for its unfair claims handling and promptly respond to all reasonable requests from your insurance company.
If the unfair claims handling continues, you should immediately seek legal counsel. Your attorney will be able to go over all your legal options with you, as well as spur the insurance companies to action in most cases.
Banks Holding Insurance Money Until Repairs are Done
Dealing with an insurance company can be a frustrating experience, even when everything runs smoothly. When a wrench gets thrown in the works, however, frustrating can turn to infuriating.
Some citizens around the country are learning that the hard way, after having their houses and businesses damaged by storms.
Normally, with an insurance claim, you would submit a claim, they would have someone come out to evaluate the extent of the damages, and then a short while later you would either receive a check or have an insurance-approved repair company fix the damage right away.
However, as some individuals are finding out, there are additional problems. One couple, who had their house and business both severely damaged, said that even following a successful insurance claim, the bank would not pay out any money until after all of the repairs were already completed. They were forced to take out a separate loan to pay for the repairs, which they repaid in full once they got their insurance money.
In addition, commonly in situations like these, people don’t realize what their policy actually covers until they go to file a claim. Many times, policy holders don’t know that their plan only covers market value instead of full purchase price. That little mistake could cost tens of thousands of dollars, and could be the difference between a fully-functional house at 100% and a house that has been barely patched up to functional.
Source: http://www.ketv.com/news/storm-victims-struggle-with-insurance-claims/26521024#ixzz355OMA1Cj
AIG to Pay Over $7 Million in Bad Faith Case
These days, everyone is familiar with insurance companies trying to do whatever they can, legally or illegally, in order to avoid or reduce benefit payouts.
Oftentimes, though, when the actual details of how insurance companies attempt to avoid paying are presented to a jury, they react with horror.
In one recent bad faith insurance lawsuit, which involves a disability claim that has been ongoing since 1998, an insurance consumer was awarded with more than $7 million (plus attorney fees and court costs) after receiving an initial $3.1 million disability verdict back in 2003.
The case in question involved an attorney who was hit by a bus back in 1998, and his multi-year battle with AIG, who not only lied and claimed that he was drunk and leaped out into traffic, but also coached the bus driver in how he should change his story about what really happened.
The disabled party ended up receiving a verdict of $3.1 million in benefits for his disability claim as a result of the lawsuit, which the jury reduced to $2.2 million for comparative fault because they agreed with AIG’s false version of events. However, the reduction was not enough for AIG, so it ended up appealing the case. AIG’s appeal successfully delayed the case for years. However, in 2008, the appeals court upheld the full $3.1 million verdict.
At that point, the insurance consumer filed a bad faith lawsuit against AIG for its underhanded tactics.
During the bad faith lawsuit, the judge found that AIG not only fabricated a completely false (but more believable) version of the accident, but also suppressed evidence that would have worked against them. In addition, AIG staged a mock deposition for the bus driver, training him in how he should respond with his modified testimony. “This is an egregious case,” the judge wrote. “The unfair claims settlement practices that AIGCS and AIGTS committed in their dealings with the Andersons were not mere oversights. They were deliberate or callously indifferent acts designed to conceal the truth, improperly skew the legal system and deprive the Andersons of fair compensation for their injuries for almost a decade.”
As a result of AIG’s underhanded attempt to avoid paying a legitimate disability claim, AIG ended up paying out well over 3 times what the initial disability benefits should have been.
Keep Tabs on Bad Faith Claims
Imagine the following scenario: You are in need of a serious medical procedure, and after checking with your insurance documentation and finding out the procedure will be covered, you go in for the operation, and it is a success. As you go over your mail later, recovering from your operation, you get a letter from your private health insurance company (or the hospital) stating that the operation was not covered, and you now owe tens of thousands of your own dollars.
You frantically study your insurance paperwork, and can’t find where the insurance company has any legal reason to deny coverage. You call the hospital and the insurance company, and get nowhere.
Unfortunately, this type of thing happens far too often. It can be Insurance Bad Faith, i.e., where an insurance company knowingly and willfully tries to get out of paying for an expensive medical procedure that should be covered. HUGE CAVAET – if this is an ERISA health insurance plan, Arizona’s bad faith law will not help you.
Even more unfortunate, the private health insurer will often get away with it because insurance consumers don’t know that the private health insurance carrier has a duty of good faith and fair dealing under Arizona law. The sad truth, however, is that most insurance companies only speak the language of money, so in order to make your point known, the only real recourse is suing for breach of contract and insurance bad faith.
Some of the more commonly denied conditions by private health insurance companies are fibromyalgia, chronic fatigue, and PTSD (post-traumatic stress disorder). All of these can be seriously limiting on one’s ability to perform work.
Some of the most common ways that private health insurance companies will try to avoid paying owed benefits are as follows:
- The private health insurer will refuse to acknowledge the condition exists;
- The private health insurer will require you to see a specialist picked by the insurance company (who is likely biased in their favor);
- If an individual does not see this specialist (even if they see 6 others), they will deny on grounds of not enough documentation or that the insured failed to cooperate with the insurer’s investigation; and
- The private health insurer will not accept how serious certain conditions can be, and refuse to acknowledge the impact on employment the condition may have.
If you have a talented Insurance Bad Faith attorney on your side, this process can be relatively smooth and less stressful than dealing with the insurance company on your own even if it does take an extremely long time. Either way, you will want to keep your eye on the insurance company’s claims handling at all times. As the years go by, insurance companies are getting trickier and trickier with how they refuse or delay payment on covered claims.
Role of Bad Faith Insurance Lawsuits in Improving Insurer Policies
When an insurance company unfairly refuses to pay an insurance policyholder for a legitimate insurance claim, the insurance policyholder can sue the insurer for damages that can potentially amount to much more than insurance benefits owed under the policy. Victims of insurance bad faith may be entitled to recover consequential damages, emotional damages, attorneys’ fees and, in some circumstances, punitive damages or other special damages. See Filasky v. Preferred Risk Nut. Ins. Co, 152 Ariz. 591 (1987); Rawlings v. Apodaca, 151 Ariz. 149, (1986); and A.R.S. § 12-341.01.
Some may see the extent of recoverable damages as a windfall for policyholders, but these damages actually play an important role in compensating victims of insurance bad faith and preventing insurers from cheating policyholders with legitimate insurance claims.
Allowing victims of bad faith lawsuits to collect damages above the amount of the benefits allowed pursuant to the insurance policy reflects the special nature of insurance contracts. Insurance agreements are not simple business contracts for the purchase of a mundane service. Insurance contracts are supposed to provide insurance consumers with peace of mind from losing their property due to accidental catastrophe; making them personal agreements.
Given the special relationship insurance companies have with insurance consumers, insurers also owe special duties to their insurance customers. An insurance company owes a duty of equal consideration, fairness, and honesty to the insurance policyholder.
Additionally, if insurance policyholders were only allowed to recover the amount rightfully owed to them, insurance companies would have little incentive to pay out legitimate claims. Many insurance companies would intentionally delay or low ball claims because at worst, the insurance company would need to pay the insurance benefits that it should have paid in the first place. These insurers would be more inclined to withhold payment of claims and make the insurance policyholder sue them to recover the insurance benefits owed under the insurance policy.
All these reasons highlight that a bad faith insurance lawsuit and damages help the insured recover what they are rightfully entitled to and also acts as a deterrent to bad faith acts by insurance companies.
Federal Court Says Bad Faith Insurance Denial Can be Brought Against Insurance Adjuster
A recent federal district court case tackled the issue of whether an Arizona insurance adjuster may be personally sued for bad faith insurance claim denial.
The case started on March 4, 2011 when Frank Gambrell collided with another vehicle on an Arizona freeway. Gambrell sustained serious injuries in the accident; his medical expenses totaled more than $87,000 and he lost more than $6,000 in wages from not being able to work. Gambrell filed a claim under multiple insurers, all of which accepted his claim except for his own personal auto insurer, IDS Property Casualty Insurance Co. After requesting reconsideration and being denied twice, Gambrell brought a lawsuit alleging bad faith denial of insurance coverage and breach of contract. Gambrell sued both IDS and the claims adjuster assigned to the case, Stacey Harrish. The defendants moved to dismiss the portion of the lawsuit against Harrish because it argued that the insurance adjuster could not be sued for a breach of the covenant of good faith and fair dealing.
Judge John W. Sedwick of the U.S. District Court for the District of Arizona ruled that Arizona law does not clearly allow or prevent an insured from bringing a claim for bad faith denial of insurance coverage. The judge noted that bad faith denial claims are based on the terms of an insurance contract to which only the insurer and insured are parties. However, the court noted that the Arizona Court of Appeals has held that the insurer and agent (the claims adjuster) are “engaged in a joint venture” which binds the adjuster to the same duties owed by the insurer. This case is helpful for policyholders because it potentially allows insureds to avoid diversity jurisdiction if the insurance claim adjuster is a citizen of Arizona and thus eliminates insurance carriers’ ability to remove bad faith lawsuits to the federal court system.
The case is IDS Property Casualty Insurance Co. v. Gambrell, Docket Number 2:12-cv-01227 .
Arizona Allows Accident Victims to Claim Liability and UIM coverage from Two Separate Policies Although With Same Insurance Company
Arizona law requires all insurers who provide motor vehicle liability coverage to also offer Uninsured (UM) and Underinsured Motorist Insurance (UIM) in the same amount as that provided by liability coverage. UIM coverage provides protection for automobile collisions and accidents in which the offending motorist does not carry enough coverage to pay the damages incurred by the personal injury victim.
The analysis becomes extremely complicated when the injury victim is a passenger in the at-fault driver’s vehicle. Can the insurance company preclude recovery from UIM coverage when the passenger-victim is also making a liability claim under the same driver’s auto insurance policy or can the injury victim recover both insurance benefits? Duran v. Hartford Ins. Co., 160 Ariz. 223, 772 P.2d 577 (1989) would seem to indicate that the insurance policy may preclude the recovery of UIM benefits so long as the claims related to the same tortfeasor and same insurance policy. However, in Taylor v. Travelers Indem. Co. of America, 198 Ariz. 310, 9 P.3d 1049 (2000), the Arizona Supreme Court allowed a passenger-victim to recover both under the liability coverage and UIM coverage from the same policy where multiple injury claimants reduced the available liability coverage to an amount less than the “each person” liability policy limit.
In a recent case American Family Mut. Ins. Co. v. Sharp, 640 Ariz. Adv. Rep. 43 (May 31, 2012), the Arizona Supreme Court mentioned but did not completely revisit this issue. In Sharp a woman was injured as a passenger on her husband’s motorcycle. The husband had a policy on the motorcycle of $100,000 by American Family, the woman also had a separate liability insurance on her separate car issued by American Family. The woman’s car policy had a $100,000 UIM limit. The woman settled with her husband’s policy for the full $100,000 and reserved the right to pursue her own UIM coverage. However, American Family denied her claim to her own UIM coverage under Duran supra because the policy had an anti-stacking provision that prohibited her from receiving both liability payments and UIM payments from the same policy or insurance company. American Family brought a declaratory judgment in federal court against its own insured. Its insured counter-sued American Family for breach of contract and bad faith denial of a claim.
American Family argued that subsection H of ARS § 20-259.01 states that if multiple polices are purchased an insurer can limit coverage so that only 1 policy can be applicable to an accident. However, the Arizona Supreme Court held that this only applied to cases where a person owned multiple cars and took separate policies out on each car to get multiple UIM coverage for the same incident. Because Sharp was making a UIM claim under her own auto insurance policy as opposed to her husband’s motorcycle insurance policy, she was entitled to receive liability coverage under her husband’s policy and UIM coverage under her own insurance policy regardless of whether or not they were both American Family insurance policies.
Legal Remedies for Dealing with Insurance Misrepresentation
Although rare, sometimes insurance agents mislead consumers into thinking that their insurance covers more than it actually does. Insurers do this hoping that the insured will never have to make a claim. However, when the insured tries to make a claim on the insurance that they were fraudulently induced to buy, the insurer will often refuse full payment. If this happens, the insured will have several options which would include filing a complaint with Arizona’s Department of Insurance at http://www.id.state.az.us/forms/cad_complaint_form.pdf.
Arizona law allows an insured to bring a declaratory judgment action in court in order for a declaration as to whether the insurance company was legally bound to provide coverage for the harm the insured experienced. The downside of such actions is that they do not in and of themselves require any party to do anything and requires no compensation for damages; it just affirms what the parties’ true legal rights and obligations are.
The insured can also bring a claim for breach of contract. Winning a judgment based on breach of contract does allow an insured compensation for certain damages limited to the terms of the contract plus attorneys’ fees in the discretion of the court. Another strategy is to file a case based in the tort of insurance bad faith including a cause of action for misrepresentation or an insurance producer malpractice lawsuit which would allow for a much broader recovery of damages including compensation for general (pain, suffering, etc.) damages.
The decision as to whether either breach of contract or tort claims can be filed is complex and depends on the circumstances of each case. These claims may be brought forward for a wide variety of cases including: insurance agent or broker neglect, improper failure to pay claims, failure to settle within policy limits, intentional delay of payment, improper investigation of claims, and refusal to defend lawsuits.
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The Arizona personal injury, accident, and insurance bad faith dispute lawyers at the Law Offices of Shane L. Harward PLC represent insurance, personal injury and accident victims throughout the state of Arizona (AZ) including, but not limited to, Phoenix, Scottsdale, Mesa, Tempe, Chandler, Glendale, Gilbert, Sun West, Sun City, Tucson, Flagstaff, Kingman, Bullhead City, Yuma, Lake Havasu, Fountain Hills, Anthem, Ahwatukee, Carefree, Cave Creek, Gold Canyon, Bisbee, Sierra Vista, Cochise, Paradise Valley, East Valley, Maricopa, Pima, Pinal, Gila, White Mountain, Heber, Payson, Prescott, Forest Lakes, Apache Junction, Avondale, Queen Creek, Benson, Black Canyon City, New River, Buckeye, Casa Grande, Coolidge, Cottonwood, Douglas, Florence, Gila Bend, Goodyear, Greer, Glendale, Lakeside, Guadalupe, Holbrook, Huachuca City, Oro Valley, Overgaard, Avra Valley, Parker, Peoria, Pinetop, Pine, Prescott Valley, Quartzite, Strawberry, Safford, Show Low, Sun City West, Sun Lakes, Superior, Surprise, Snowflake, Tombstone, Wickenburg, Winslow, Wilcox, Williams, Young, Youngtown, and surrounding areas.