$16 Million Bad Faith Judgment Against Allstate is Upheld
An appeals court has upheld the $16 million bad faith judgment against Allstate Insurance Co. for the insurer’s failure to settle a claim for the $50,000 limit on an auto insurance policy. Virginia and Edward Johnson filed an auto accident claim against Allstate after they were seriously injured in a motor vehicle crash caused by Wayne Davis Jr., an Allstate policyholder, in March 2000. Edward spent 35 days in the hospital for his injuries, while Virginia stayed for 40 days. Their medical expenses for their hospital stay cost $320,000.
Although they initially agreed to settle for Davis's $50,000 policy limit with Allstate, the insurance company took 6-months to respond to their claim and by then the 60-day statutes of limitations for accepting the insurance claim had passed. When they were unable to reach a car crash settlement with Allstate, they sued Davis for personal injury.
Davis and the Johnsons reached a settlement agreement. As part of settlement, the couple agreed not to collect the $5 million judgment against Davis in return for giving the Johnson’s 90% of his bad faith insurance claim against Allstate for their refusal to settle his case with them.
Together, the Johnsons and Davis sued Allstate not only for its bad faith refusal to settle but also for equitable garnishment. Allstate had disputed whether the Johnson’s injuries were a result of the accident with Davis.
The Missouri Court of Appeals's decision upholds the verdict that a jury had awarded to them in 2006: $5.8 million in compensatory damages and $10.5 million in punitive damages.
Bad Faith Claims
Unfortunately, insurance companies have been known to wrongfully refuse to pay claims that they should cover. This goes against Kentucky law, which mandates that insurers exercise good faith when dealing with policyholders or others filing claims.
If you were injured in an auto accident an your insurance company or the insurer of the liable party’s insurance company wrongfully denied your claim, you may be entitled to damages from the insurance company for their bad faith practices. A Louisville personal injury lawyer with experience in dealing with both injury cases and bad faith claims can help you.
Missouri Court Upholds $16 Million Bad Faith Award Against Allstate, InsuranceJournal.com, July 30, 2008
Appeals court upholds $16 million verdict against Allstate, KansasCity.com
Related Web Resource:
State Insurance Laws, Badfaithinsurance.org
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