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Bad Faith Blog

We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.

Bad Faith Blog
October 23, 2017

Missouri Appellate Court Holds Rental Car Company Is Not an Insurer and Not Liable for Bad Faith

Summary: A motorist, who was injured in an automobile accident with a rental car, brought a garnishment action against the renter and car rental company, seeking the $25,000.00 limit provided by the Motor Vehicle Responsibility Law (MVFRL). The renter filed a cross-claim against the car rental company alleging bad faith failure to settle and breach of contractual duty to defend. The trial court granted summary judgment for the car rental company and the renter appealed. On appeal, the Missouri Court of Appeals, Eastern District, found the rental car company did not have a duty to defend the renter and the rental car company did not commit bad faith in refusing to settle.

Bad Faith Blog
October 30, 2016

Against Public Policy But Not Vexatious and Unreasonable

Summary: The Hadarys were involved in an automobile accident with Carlos Velez, a rental car driver. Both the Hadarys and Velez had automobile insurance at the time of the accident. Velez declined to purchase the supplemental liability insurance offered by Hertz at the time of the rental, and his insurance policy limit was too low to cover the injuries incurred by the Hadarys. The Hadarys had underinsured motorist coverage through Safeway, but Safeway pointed to an “exhaustion clause” in its policy providing that Hertz had to first exhaust its financial responsibility liability before Safeway would have to pay. The trial court agreed with Safeway, but the appellate court reversed holding that the lower court’s result was against public policy. Furthermore, the trial court found that Safeway did not engage in unreasonable and vexatious conduct. The appellate court affirmed the trial court ruling reasoning that Safeway’s interpretation of its policy was reasonable but wrong because its interpretation contravened public policy.