It is a common belief that insurance companies exist with the primary purpose of protecting you. However, the central goal of most insurance companies is to protect their bottom lines. So, it is no wonder tort lawsuits alleging insurance bad faith practices are on the rise.
What Is Bad Faith?
Bad faith refers to a person or company acting dishonestly. Insurance companies can act in bad faith in a variety of ways, but the following are very common:
- Dishonest purpose
- Lying about coverage
- Performing duties in an untrustworthy way
- Failing to follow fair standards
- Having a fraudulent or malicious intent.
Top 5 Biggest Bad Faith Verdicts
When a company is slapped with a bad faith verdict, it often ends up paying insane amounts of money to plaintiffs. Also, the business is typically responsible for attorney’s fees for both parties.
Here are five of the biggest bad faith verdicts against an insurance company.
1. $55 Million Verdict Against American International Group
The pipe-joining company Victaulic sued American International Group for bad faith practices after American International Group failed to provide coverage Victaulic in the case of defective product liability.
In court, AIG argued that they had no duty to defend Victaulic, but the court ultimately found the NYC-based insurance behemoth guilty of breach of contract, bad faith conduct, and malicious intent. Victaulic was awarded more than $55 million as a result.
2. $45 Million Verdict Against UPS and Liberty Mutual
Fern Johnson was injured while working for UPS. She was eventually awarded lifetime worker’s compensation benefits but had to fight for over a decade to confirm that she was entitled to those benefits.
Even after the court awarded her the benefits, UPS and their insurance company, Liberty Mutual, stopped paying her worker’s compensation in direct violation of a court order.
Johnson sued UPS and Liberty Mutual for bad faith. UPS was required to pay $15 million, while Liberty Mutual was required to pay $30 million.
3. $25 Million Verdict Against Fidelity National
The Rio Mesa Holdings LLC development company wanted to turn 1,600 acres of land into a residential development that would have access to the San Joaquin River in Fresno, Calif. Access to the river would have been a primary marketing attraction for the residential project.
Rio Mesa Holdings purchased a title policy from Fidelity National for $25 million to protect the property’s rights. However, Fidelity National failed to block a local subdivision’s claims to river access. Rio Mesa Holdings sued Fidelity National for bad faith, and a Fresno jury awarded them $25 million.
4. $22 Million Verdict Against Allstate.
Patrick Hennessey was helping Ryan Caruso push Caruso’s car off the road when another vehicle struck Hennessey and pinned him to Caruso’s car. As a result, Hennessey had to have his right leg amputated.
Caruso’s insurer Allstate became responsible for paying for Hennessey’s injury since Caruso’s negligence led to the crash. Despite Caruso having a policy of $250,000, Allstate refused to pay.
Hennessey sued Caruso and won $19 million. Hennessy then teamed up with Caruso, sued Allstate for bad faith practices, and was awarded $22 million.
5. $10.2 Million against Selective Way Insurance Company
Petersburg Regency, LLC are the property owners of a hotel in Petersburg, Va. which was insured by Selective Way. When the hotel was damaged by Hurricane Ivan, Selective Way disputed paying the claim by arguing that there was not sufficient proof that the damage was caused by the storm.
Petersburg Regency, LLC filed a lawsuit alleging bad faith against the insurance company and was eventually awarded $10,225,584.
Contacting a Lawyer
If you believe you are the victim of an insurance company’s bad faith actions, you should contact a lawyer right away. Insurance companies are represented by armies of experienced lawyers, and you will need to have good protection against them. Kerley Schaffer LLP has the experience necessary to take on insurance companies acting in bad faith. Contact them for a free consultation today!