Insurance Bad Faith Verdicts

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Suffering a personal injury in a car accident, slip and fall, or other accident is bad enough, but when the insurance company involved refuses in bad faith to negotiate or settle a claim, makes misrepresentations to the victim, misinforms the court, or otherwise plays dirty in order to preserve its own profit margins, the impact can be devastating.

Not only can a delay in payment of claims impact the availability of necessary medical care, but the injury victim can suffer extreme emotional distress and even medical setbacks. Juries generally have taken a dim view of insurance company bad faith, as indicated by the verdicts below, gathered from news sources around the country.*

*Results taken from recent news articles. Results not typical. Prior results do not guarantee a similar outcome.

$568,000 to Woman in Case against Progressive Select Insurance

A Florida jury just awarded $568,000 to a woman who was hit by an uninsured motorist. The woman suffered neck and back injuries and sued her insurance company, Progressive Select Insurance, after it refused to pay her claim-even though she had uninsured motorist coverage with them.

For related news, check out Total Injury's article on the Ten Worst Insurance Companies.

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$130 Million to Homeowners Underpaid by Farmers Insurance

Homeowners who said Farmers Insurance underpaid on their claims were recently awarded $130 million in a class action lawsuit.

The homeowners alleged the insurance company breached their contract and showed bad faith and fraud when they failed to pay contractors for overhead and profits. The jury awarded $50 million for breach of contract, $50 million for acting in bad faith and $30 million in punitive damages.

The class action lawsuit was comprised of 76,000 people who had an average of $575 in unpaid bills.

Farmers Insurance, a Los Angeles-based company and subsidiary of Zurich Financial Services, is appealing the jury award.

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$20 Million Civil Verdict Overturned: Attention to Anyone Being Defended By an Insurance Company for a Car Accident or Liability Claim

A $20 million civil injury verdict was overturned last week after the Kentucky Court of Appeals ruled that litigation conducted couldn't be used against insurance companies in bad-faith claims.

This ruling addresses the question of whether insurance company lawyers are acting on behalf of the insurance company instead of the customer. The overturning of the injury verdict affirms that defense lawyers must act independently of insurance companies.

Under Kentucky state law, a civil defense lawyer's only client is the insured driver, whether or not the insurance company is financially covering the bills or responsible for the settlement.

Applying that principle to the case at hand, the Court of Appeals said a 2004 unfair claims handling a lawsuit against Cincinnati Insurance Company should have never gone to trial.

The case involved a 1998 crash where a truck driver fell asleep and struck a vehicle, causing severe injuries to a man in the car. During the negotiations, the injured man sued the insurance company for allegedly handling his claim in bad faith because he said it was trying to gain control of the defense attorney's strategy. He was awarded $20 million in 2004.

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$13 Million in Insurance Payouts Required for Dropping Clients

More than 2,000 California insurance clients who were deemed to have been improperly dropped from their insurance policies by some of California's largest insurance companies have been ordered to pay restitution and reinstate the dropped policyholders, as part of a settlement reached with the California Department of Managed Health Care. Anthem Blue Cross has agreed to pay $10 million and reinstate the policies of 1,770 clients, while Blue Shield of California will pay $3 million and restore 450 policies. Additionally, both companies agreed to pay any outstanding medical debts not covered as a result of their actions.

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$233,000 for insurance bad faith estimates for glass repair

New York Attorney General Andrew M. Cuomo, on behalf of 424 New Yorkers, reached a settlement equaling $233,000 with Quality First Auto Glass and its owner, Alan Moore. The lawsuit filed on behalf of the consumers alleged that the auto-glass repair shop had collected some money from bad faith estimates, but further charges were not paid, which a Nebraska-based debt collection agency had sought to obtain. Per the agreement, the $233,000 amount is the outstanding charges sought by Quality First Auto Glass, which the customers will not have to pay due to the court's decision that the charges were based on bad faith estimates.

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Uninsured Patients to Receive 35% Refund for Overpriced Medical Bills at Scripps Health

Scripps Health hospital system in San Diego, California settled a class action lawsuit over alleged "unreasonable, unconscionable and excessive rates" for treatment of uninsured patients at the hospitals. Under the terms of the settlement that was agreed upon, participants in the class action suit will be able to receive a refund for 35% of medical bills for treatment received between July 19, 2002 and the present. Uninsured patients with a low income may also qualify for additional discounts. Further, Scripps Health will implement standard pricing and collection policies that include discounts for all uninsured patients regardless of income.

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Walgreens Pays Undisclosed Amount for Dispensing Wrong Medication Leading to Miscarriage

A St. Louis, Missouri woman reached a settlement for an undisclosed amount with Walgreens, resolving a lawsuit she filed against the pharmacy for dispensing the wrong prescription medication that resulted in a miscarriage. She was prescribed Materna, a prenatal vitamin, but was mistakenly given Matulane, a chemotherapy drug that interferes with cell growth. The effects of Matulane directly caused her fetus to develop abnormally, as well as physical sickness in the mother. Several months later she miscarried the fetus. The actual amount of the settlement was undisclosed because she and her husband signed a confidentiality agreement. Walgreens has had bad publicity over the past year because of trouble with medication dispensation, as they settled a massive $26 million wrongful death suit for dispensing the wrong amount of cancer medication to a woman.

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$1 Million Settlement by Allstate Insurance for Failure to Pay Claim

Allstate Insurance Co., an insurance giant that has drawn rounds of criticism for doing anything in its power to withhold claims compensation from customers, paid out a massive settlement of $995,000 for a lawsuit over a disputed claim. John and Annette Ferranti from Brooklyn, New York, sued Allstate after it refused to pay for damage to their home's foundation from the effect of vibrations made by an Air France Concorde jet. According to the claim they made to Allstate, the Concorde jet buzzed their home several times after struggling to take off.

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New Jersey Woman Receives $50K Verdict against Allstate Insurance

The Camden County Superior Court in New Jersey recently ruled that Sarah Jones should receive $50,000 from Allstate Insurance, in compensation for Allstate's failure to cover medical conditions that arose from a car crash in October 2002. Jones sustained low back herniation in the accident, which caused numbness in a leg and carpal tunnel injuries, but Allstate claimed that these symptoms were pre-existing and refused coverage.

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Life Insurance Company Hit for $39 Million for Failure to Pay

Oxford Life Insurance was slammed with a massive $39 million suit for failure to pay a small credit insurance claim made by one of its policyholders. Charles Kocher, a West Virginia farmer, paid Oxford around $700 for a credit insurance policy that would pay off the remainder of his truck loan in the event of dismemberment or death. Shortly thereafter, his foot was crushed in a tractor accident, which led to complications involving amputation of the lower part of his leg. After approving several payments, the insurance company abruptly stopped payments and became difficult when Kocher inquired. Mistreatment cited during the case included refusal to acknowledge the removal as a full amputation, claiming that Kocher maimed himself intentionally, and a visit by a chief Oxford official under false pretenses, which, as the court viewed it, was an inappropriate attempt to induce the policyholder to settle. The ruling judge cited the insurance company for a "pattern of improper conduct" over several years that led to their negligence and abuse in the case of Kocher.

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$14 Million Punitive Damage Ordered By Jury For Insurance Company's Refusal To Pay Benefits

Darla Johnson suffers from chronic fatigue, fibromyalgia, lupus and an immune system disorder and was denied benefits from Prudential Insurance Company. Prudential was paying disability benefits to Johnson starting in 1995 but then began to deny her benefit claims in 2000. The company made a switch to a more stringent evidence requirement to support disability claims and paid a doctor to perform a "perfunctory exam.to find she wasn't disabled". Johnson sued and was awarded $1.5 million in compensatory damages. Prudential was also ordered to pay $14 million in punitive damages.

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State Farm Decides to Settle With Katrina Victims

Recent $2.5 Million Verdict Motivates Insurer to Settle 640 Denied ClaimsState Farm Insurance has said that it has made 640 settlement agreements, amounting to hundreds of millions of dollars, with homeowners who incurred damage flood water during Hurricane Katrina. Previously, State Farm had denied numerous claims but lost a landmark lawsuit recently for $2.5 million in damages to a family whose claims were denied.

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State Farm to Pay $2.5 Million to Couple for Denying Katrina Claim

State Farm Insurance will pay $2.5 million to homeowners Norman and Genevieve Broussard for denying their homeowners policy claims after their home was damaged by Hurricane Katrina. In a landmark lawsuit that has tongues wagging all over the United States because it may benefit others who have been denied insurance claims for damages caused by Hurricane Katrina, a U.S. District Court jury decided that State Farm Insurance denied the Broussards' claim without a full investigation and awarded the Broussards $2.5 million. The Broussards' home was reduced to a slab after Hurricane Katrina. State Farm and other major insurance companies have been hit with an onslaught of lawsuits for denied claims resulting from Hurricane Katrina damage.

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$250,000 for Flooding Deaths

The city of San Antonio has agreed to pay $250,000 to the daughter of an elderly couple who died when their car was swept off a road during a flood in 2002. Melinda Savage, the daughter of 70-year-old Robert and Carmen Sanchez, filed a negligence suit against the city, alleging that it was negligent for not warning people of high waters and providing barricades to close off dangerous areas. The city settled the suit and has since installed precautionary signs to warn citizens of flooding.

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$20 million verdict against Allstate - Man just wanted his car fixed

Ted K. Fields of Valparaiso, IN was awarded $20 million in a bad faith case against Allstate for the insurance company's unwillingness to pay for Fields' medical and car repair costs after he was hit by an uninsured driver. Fields suffered spinal injuries, $7,000 in medical bills and $18,000 in lost wages after a car accident in 1995. After the accident, Fields claimed that the stress from Allstate's insistence on settling for a lesser amount than what he was owed resulted in a rise in his blood pressure that resulted in heart problems and a stroke. "All I ever wanted was to get my car fixed and my bills paid, but Allstate turned my claim into World War III," Fields said in a statement. Allstate has indicated that it will appeal the verdict.

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