July 17, 2009 by admin
According to the law, insurance companies have a good-faith responsibility to deal fairly with customers. This means coverage providers and their agents must actively seek ways to pay all fair benefits promised to policy holders, not to disallow them. Sometimes, when policyholders need them the most, insurers redefine their obligations and services to avoid paying promised benefits. Common tactics include denying claims or dragging them out so long that insureds simply get tired of fighting and give up.
HER INSURER SAID, ‘NO’
A 32-year-old doctoral student suffered career-ending brain injuries in a head-on collision with a negligent driver. When the other driver’s insurance failed to cover all her medical expenses, she filed an underinsured-motorist claim with her own auto insurance plan, which entitled her to $1.5 million in benefits. Her insurer refused to pay for several years, claiming she had no head injury. Her attorney sued the insurer and its agent, alleging bad faith, breach of contract, and violations of a state unfair trade practices statute. A jury awarded her significant compensatory and punitive damages, plus attorney fees and prejudgment interest.