We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.
No Release? No Problem! Montana Supreme Court holds settling for policy limits without obtaining a release did not breach a duty to the insured
In High Country Paving Inc. v. United Fire and Casualty Co., after a trucking accident, Plaintiff’s counsel submitted a demand on the carrier for policy limits without releasing the insured. The insurance carrier agreed to the settlement, and offered to continue to pay defense costs after settling for policy limits.
Eleventh Circuit, applying Florida law, concludes a consent judgment does not satisfy the requirement of an excess judgment for a bad faith claim.
A commercial vehicle was involved in a motor vehicle accident resulting in paralysis to a passenger. The commercial vehicle was insured under a Garage policy and a Commercial Umbrella policy, with a total amount of potential coverage of $3 million. In addressing the causation element of a bad faith claim under Florida law, the Court addressed the “excess judgment rule” and concluded a consent judgment is not an excess judgment for purposes of a bad faith claim and does not fall within the three exceptions to the general rule that an excess judgment is required.
Louisiana appellate court finds insurer acted in bad faith when relying on report prepared by third-party claims administrator
In a recent decision, Dudenhefer v. Louisiana Citizens Property Insurance Corp., a Louisiana appellate court determined an insurer acted in bad faith after basing a coverage denial on the a report prepared by a third-party claims administrator.
Hawaii Supreme Court: The Insurer’s Good Faith Claim Handling Duty Begins Before the Formal Claim Submission
The Supreme Court of Hawai’i’s recent opinion restated two important points of Hawai’i bad faith law: (1) the insurer’s good faith claim handling duty begins with the first communication with the insured, even before the formal claim submission and (2) the insurer’s compliance with the terms of the insurance contract can be insufficient to avoid bad faith liability. Therefore, in order to defeat a bad faith claim under Hawai’i law, the insurer must at all times act in good faith before and after the claim submission. The court restated this duty when reversing a summary judgment for a health insurer. Although it complied with the terms of the insurance contract following receipt of the formal claim, it arguably misled its insured in discussions prior to the claim.