• Bob Siems

J.L. v. State Farm Fire and Casualty Company, MIA No. 27-1001-11-00006 (August 2, 2011).

Insurer acted in bad faith by misstating or failing to note major facts about the investigation in its claims file.

The MIA found that State Farm acted in bad faith because it failed to accurately record what happened in the accident.

On May 20, 2010, Plaintiff was riding in a car driven by her husband. They were going approximately 60 miles an hour when they were rear-ended by a speeding car. Their car was knocked off-road and flipped over. (Op. 4.) Plaintiff suffered various injuries and began suffering chronic pain because of the accident. (Op. 4-6.)

Plaintiff filed a claim with State Farm. The other driver’s insurer, GEICO, denied coverage because the other driver was an excluded driver on the policy. Plaintiff therefore chose to pursue a UM claim. (Op. 6-7.)

Farm asked Plaintiff for medicals, which totaled $9,176.26. State Farm eventually offered $13,100. Negotiations did not take place and Plaintiff filed suit. (Op. 6-7.)

Plaintiff claimed that State Farm had unreasonably delayed negotiations, refused to talk to Plaintiff’s lawyers, and failed to resolve the claim quickly. State Farm blamed all delays on Plaintiff. (Op. 7-8)

The MIA began by rejecting Plaintiff’s claims. The MIA felt that neither party had moved forward quickly and that all blame was mutual. (Op. 8.)

Then the MIA took up an apparently undiscussed issue. State Farm’s claim log contained numerous mistakes. It twice referred to the accident as a phantom vehicle incident. It failed to note that Plaintiff had been rear-ended. It mistakenly stated that Plaintiff had walked into the ER when she actually was transported by ambulance. It also, most critically, failed to notice that an MRI showed inflammation of the small rotator cuff tendon, arguably Plaintiff’s most serious injury. (Op. 8-9.) Calling this a “close case”, the MIA found that the errors rose to bad faith.

#MarylandInsuranceAdministration #BadFaithClaimHandling #AutoInsurance #InsuranceBadFaith #CaseLaw

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