Lockwood v. Geico – When is a Delay of Insurance Payment Bad Faith?

In Massachusetts, drivers are required by law to purchase auto insurance protection. But when you truly need it, you may find that the insurance company will fight tooth-and-nail to avoid a payout.
If an insurance compensation claim is rejected or delayed without good cause, or if the consumer is bullied into a low-ball settlement, a court may find that the firm has acted in bad faith. That can result in penalties that are paid to the victim over and above what would otherwise be owed, regardless of policy limits.

Boston drunk driving injury lawyers know that if it’s possible to reach a fair settlement prior to trial, that’s often the preferable route. But if your insurer is playing hardball, know that we’re ready to fight back aggressively on your behalf.

A recent bad faith insurance claim was reviewed by the Alaska Supreme Court in Lockwood v. Geico General Insurance Company, where the plaintiff alleged a drunk, uninsured driver caused a crash resulting in injury.

There was never a dispute in the case regarding who was at-fault. The plaintiff had been sitting in her vehicle waiting for a red light to change when she was rear-ended by the driver of a pickup truck who failed to stop in time. It turned out he was intoxicated and had no insurance coverage.

The plaintiff, however, did have insurance, and her policy allowed for coverage of $10,000 worth of medical expenses and up to $50,000 for uninsured motorist coverage. This is a policy that protects drivers who are involved in crashes with those who don’t have insurance coverage, as required by law. Some states require drivers to carry uninsured motorist coverage, though it’s optional in Massachusetts.

The plaintiff sustained injuries to both her neck and back, which required ongoing medical treatment. Once her $10,000 in medical coverage had maxed out, her insurer offered her $750 to settle her uninsured motorist settlement. Wisely, she turned this down.

This set off a three-year battle over benefits. While the insurance company questioned the size of her medical bills and whether the treatments were necessary, she was forced to take out a loan to cover them for a time. Eventually, she was forced to stop therapy sessions because she could no longer afford them. Meanwhile, despite questioning the level of care, the insurer did not request an independent medical exam in an attempt to verify its suspicions. It did up its settlement offer to $10,000, but the plaintiff still refused.

At the end of those three years, the plaintiff had enough and filed a bad faith insurance claim. This prompted the insurer to settle the uninsured motorist claim for $25,000 (a far cry from $750!). Still, the plaintiff reserved the right in spite of that settlement to pursue the bad faith insurance claim.

While a lower court granted summary judgment to the defense, the state supreme court ultimately reversed, finding there was a genuine issue of material fact as to whether the insurance company had a legitimate reason to delay insurance coverage as long as it did.

Our firm is experienced in handling bad faith insurance claims, and we are committed to making sure you obtain the compensation you deserve.

If you or someone you love has been injured a Boston drunk driving accident, call for a free and confidential appointment at (617) 777-7777.

Additional Resources:
Lockwood v. Geico General Insurance Company, May 2, 2014, Alaska Supreme Court
More Blog Entries:
Supreme Court Approves Anonymous Drunk Driving Tipster Stops, May 11, 2014, Boston Drunk Driving Injury Lawyer Blog

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