Bad Faith Blog

Summary: Williams was injured in a car accident, settled with the at-fault driver’s insurance company for the policy limits of $25,000, and then made a claim against her own insurance policy under the underinsured motorist (UIM) provision. Her Owners Insurance Company (“Owners”) policy provided $100,000 of UIM coverage. Claiming medical expenses in excess of $50,000 and lost wages in excess of $60,000, she demanded the policy limits, but her demand was rejected. Williams then filed suit against Owners alleging breach of contract and both common law and statutory bad faith delay in processing her claim. The district court granted Owners’ motion for summary judgment after finding that Williams failed to produce evidence showing the unreasonableness of Owners’ conduct. On Williams’s appeal, the United States Court of Appeals for the 10th Circuit affirmed on all counts.

In Scottsdale Ins. Co., et al. v. Addison Ins. Co., et al., No. WD75963 (Mo.App.W.D. Oct. 1, 2013), a “case of first impression,” the Missouri Court of Appeals both redefined the elements of a third-party bad faith failure to settle claim and recognized for the first time an excess carrier’s right to pursue a primary carrier under a theory of equitable subrogation to recover for a primary insurer’s bad faith failure to settle.