Bad Faith Blog

The Georgia Court of Appeals affirmed summary judgment for GEICO and held that there was no evidence of a frivolous and unfounded refusal to pay its insured’s demand for the $25,000.00 limit of her underinsured motorist policy, which was needed to support a bad faith claim brought under Ga. Code Ann. § 33-7-11(j) (failure to pay within sixty days of demand). The court found that GEICO timely and thoroughly investigated the claim upon receipt of the demand letter. A later jury verdict against the underinsured motorist greatly exceeding the $25,000.00 policy limit alone was insufficient to establish that an insurer acted in bad faith.

Peterson filed an underinsured motorist claim against her UIM carrier, Western National, which had a $250,000 policy limit. After a series of migraine headaches caused by her whiplash injury, she started receiving periodic Botox injections to help her manage those headaches. Her insurance company made a series of “low ball” settlement offers after she settled the liability claim for $45,000 of the $50,000 limit of the tortfeasor’s policy.

The Western District of Pennsylvania held that an insurer did not act in bad faith but was well within its rights in denying an insured’s claim and voiding his policy.  The insured’s material misrepresentations caused the court to find that no reasonable jury could conclude that the insurer acted in bad faith in denying the claim. Mr. Felix submitted a homeowner’s insurance claim in excess of $1 million after a fire ravaged his home. The insurer assigned the case to a special investigations unit after identifying several “red flags” suggesting fraud. 

Summary: Applying Florida law, the Federal District Court found the insurer did not act in bad faith or delay tender of the policy limits when it conducted a reasonable investigation into plaintiff’s injuries. Instead, the District Court found it was plaintiff who caused the delay by failing to comply with the insurer’s reasonable requests for medical records.