Drivers throughout the country are generally required to carry liability insurance that is designed to protect them in the event of an accident. While most drivers realize that insurance carriers are for-profit companies, it is reasonable to believe that an insurance company will do its best to protect their customers when an accident occurs—regardless of who was at fault for the crash. Unfortunately, however, such is not always the situation, as a recent decision by the Florida Supreme Court clearly demonstrates.
A Tragic Accident
The case began with a fatal car accident in August 2006 in which one man was killed. The at-fault driver had an auto insurance policy through GEICO with a liability limit of $100,000. According to court records, GEICO advised the driver that while there was coverage available, the claim against him would likely exceed his policy limits and that he had the right to hire an outside lawyer.
An attorney representing the deceased victim’s estate contacted GEICO asking for a statement from the at-fault driver and other documents and records. Court records indicate that the claims handler at GEICO denied the attorney’s request but did not tell their customer—the at-fault driver—about the request for two weeks. The claims handler reportedly refused to communicate with the driver and the decedent’s estate several more times. Finally, the deceased man’s estate filed a wrongful death lawsuit against the driver, resulting in a jury verdict of $8.47 million in favor of the victim’s estate.
Bad Faith Action
Following the wrongful death verdict, the driver filed suit against GEICO alleging bad faith in the handling of the claim. The driver claimed that the claims handler’s failure to communicate and the company’s refusal to attempt to facilitate a settlement ultimately led to an excess verdict against him. At trial, the jury found in favor of the driver, but GEICO appealed. On appeal, the trial court’s decision was reversed. The appellate court held that there was insufficient evidence of bad faith and that “the insurer’s actions did not cause the excess judgment rendered against the insured.”
Last month, the Florida Supreme Court overturned the appeals court ruling and reinstated the trial court’s decision. The court’s decision held that an insurance company has a duty to handle each claim with the same level of “care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” The court went on to explain that simply telling a policyholder that a litigation is probable and a big judgment is possible is not enough to absolve an insurer of its liability. “Rather, the critical inquiry in a bad faith [action] is whether the insurer diligently, and with this same haste and precision as if it were in the insured’s shoes, worked on the insured’s behalf to avoid an excess judgment,” the court’s ruling explained.
The court’s decision was split 4-3 and applies only to cases that involve Florida law. Legal experts believe, however, that policyholders around the country will point to this case when allegations of bad faith by their insurance companies arise.
Call Us for Help
If your insurance company has mishandled your claim regarding a car accident in which you were injured, contact an experienced Connecticut personal injury attorney. We will help you explore your options for taking action and getting the compensation you deserve. Call 860-290-8690 for a free consultation today.