I can't decide what I dislike more, the Dallas Cowboys (I grew up a 49ers fan), or insurance companies. I guess, based on articles like this one, I'd have to say insurance companies.
In this Connecticut case, a jury smacked The Hartford Insurance Company with a $15 million jury verdict for unfair trade practices. Apparently, The Hartford ran a deceptive program that "allegedly suppressed shop labor rates artificially by exclusively using its own representatives to make appraisals following accidents."
This sounds deceptively familiar to a phenomenon I blogged about last year called insurance steering. The process "encourages" insured individuals to use "preferred providers," or else face increased repair costs.
The problem with these types of schemes is that they end up hurting consumers who seek honest repairs for their damages. The insurance companies profit with lower costs and higher returns, while consumer only receive increased rates and liabilities.
I believe these actions constitute bad faith on the part of insurance companies. You'll note that a recent decision by the Oklahoma Court of Civil Appeals cleared the way for a class action, breach of contract lawsuit against Farmers Insurance Company, related to the way Farmers processed, reviewed, and denied medical payment claims from policyholders.
If this class-action lawsuit moves forward against Farmers, they could potentially suffer huge losses. This wouldn't be the first time Farmers would lose big in an Oklahoma class-action lawsuit. In 2008, a Lawton jury found that Farmers improperly paid contractor bills costing the homeowners extra money, which their homeowner's insurance should have covered. The jury award the class-plaintiff $150 million (reduced to $80 million) in damages for Farmers' breach of contract, bad faith and egregious conduct.
I know of one final, and recent, federal court case against State Farm, where the plaintiff received in excess of $275,000 because of the company's bad faith actions. Although the case settled before trial, the facts indicated fairly strongly that State Farm acted in bad faith when negotiating settlement on a motor vehicle collision.
The evidence indicated that the policyholder was the at-fault party in an automobile collision. The insured had $25,000 in liability insurance coverage. State Farm's insurance adjuster refused to settle the claim without particular, and unnecessary, demands. The injured party filed a lawsuit. After learning of the lawsuit, State Farm offered to settle the claim for policy limits. The injured party refused, and obtained a judgment against the policyholder for $250,000. Following the judgment, the policyholder sued State Farm for breach of contract and bad faith, which resulted in the previously-mention settlement agreement.
I can't say that this type of behavior is rampant among insurance providers. However, based on these few incidents, there's a good indication that similar bad faith actions happen everyday. If you believe you've been a victim of insurance bad faith or deceptive practices, give our office a call: (405) 748-0318, or email: contact@absolutelawfirm.com. We'll be happy to examine your situation and discuss your issues for free.
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