Sam Schad posted on January 04, 2011 06:32
Most of us trust our own insurance company to deal fairly with us when we need coverage for us or our loved ones. Our insurance companies can disagree with us – but they must meet their fairness obligations when reasonable minds could not disagree on the right way to settle a case. When an insurance company acts unfairly, it’s called “bad faith”.
We recently resolved a bad faith case on behalf of a wonderful lady who was struck and killed by a car while she was walking across the street. Her death was a terrible tragedy to her family. The motorist who hit her had minimum insurance limits. Luckily, the family had $250,000.00 in underinsured motorist coverage – special coverage that is designed to protect from low limits drivers.
The family filed a claim. The insurance company denied without a good cause. We filed a lawsuit to make the company keep its promise. Each time they raised another meritless defense, we fought to have it dismissed. When all of the defenses were gone, they offered to pay the limits of the policy.
Too little, too late. The insurer had acted in “bad faith”. The company ultimately paid $500,000, more than twice their policy limits, to settle the case right before trial.
Everyone should review their insurance policy to make sure that they have underinsured motorist coverage. It’s not expensive, and it can protect you and your family if something goes wrong.