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.

Under the law, negligence is inattention that causes a person harm. Negligence can take two forms: action, such as a mason carelessly dropping a heavy brick off a scaffold; or failure to act, when a business owner disregards repairing a broken step on a stairway in a dimly lit corridor.

 

As directed, an auto-repair patron moved his car to a numbered parking spot. As he left his car, a dealership employee driving another vehicle failed to see him and ran over his foot. His crushed foot developed into a complex injury, damaging the peroneal nerve and causing constant pain, color and temperature changes, and loss of hair on his foot.  A former highly paid stockbroker, the injured man attempted to work for more than a year, but medications and burning pain forced him to stop. His attorney then sued the dealership, alleging its employee negligently failed to keep a proper lookout. The parties reached a significant settlement prior to trial.