Law360 reports that a California appeals court recently found that insurers who fail to begin settlement negotiations in cases where their policyholders are clearly liable are not acting in bad faith.
The ruling comes in the wake of a $6.9 million bad faith lawsuit brought against Mercury Insurance Co. by the family of a woman who was seriously injured in a multi-car collision caused by one of Mercury’s policyholders. The complaint alleged that the insurance company “discouraged any efforts at settlement, refused to investigate the claim promptly and insisted on receiving information that was already known or immaterial to settling the claim.” In response, the court claimed that the plaintiff had made no settlement offer, rejecting the notion that it is the insurer’s duty to initiate negotiations if it is clear that the claim could surpass the limits of the policy.
Previously, California’s Ninth Circuit had ruled in 2012 that insurance companies are required to try to settle a claim in cases involving clear liability of the policyholder; however, that ruling was later amended.
Are you victim of insurance bad faith? Get in touch with the legal team at Hodes Milman Liebeck at 866-730-1976 or online at hmlm.com today to learn how our attorneys can help you with your case.