• Bob Siems

D.C. v. Nationwide (MIA #27-1001-13-00017) (2013)

Nationwide lowballed its insured by offering $125,000 when they valued the case at $235,410 without being able to explain why their offer was so low.

The Occurrence

Plaintiff was injured in a two vehicle accident when the other driver failed to yield. Plaintiff's car was totaled. The other driver’s insurer tendered its liability limits —$25,000. (It was a Virginia policy, so it was not subject to Maryland's 30/60 minimums.)

Plaintiff had auto insurance with Nationwide with $300,000/$300,000 UM/UIM and $10,000 in property damage with a $250 deductible.

The Facts

At the time of the complaint, Plaintiff had undergone three surgeries and had another coming up. Total medicals were $53,000. Her doctors estimated future medicals would be roughly $37,000. Her doctor also believed there would be some permanent physical injuries and work restrictions based on the three surgeries already undergone.

In January 2013 (four months before receiving the doctor’s note about permanency), Nationwide offered $30,000 in new money. Plaintiff counter-offered with $275,000. By March 25, Nationwide put a “maximum value of $150,000” on the claim, including $50,000 for pain and suffering and the $25,000 from the other driver’s policy. On May 6, negotiations broke down because Plaintiff would not abandon a policy limits demand.

On May 10th, Nationwide increased its maximum value to $185,410, including $115,000 for pain and suffering and the original $25,000. That same day, Plaintiff’s lawyer sent an ultimatum demanding policy limits by June 10 and threatening a bad faith action. Plaintiff cited the over $50,000 in medicals, the cast fourteen months after the accident, the four surgeries, the loss of ability to “perform household services, work, or handle activities of daily living on her own,” the need for household help, and the loss of consortium.

On May 28, Nationwide increased the maximum value to $235,410, including $55,410 for medicals, $15,000 for future medicals, $115,000 for pain and suffering and $50,000 for forecasted “graphing, therapy, and ‘most likely’ loss of consortium, and the $25,000 already


On June 20th, ten days after Plaintiff’s ultimatum expired, Nationwide offered $125,000 in new money.

The MIA's Opinion

Plaintiff argued that Nationwide low-balled them. Nationwide argued that they simply disagreed about the value of the claim.

The MIA looked at the numbers and concluded that Nationwide “made an informed judgment” when it evaluated the claim at $235,410. But Nationwide “lowballed its offer” when it offered only $125,000. Nationwide could not explain to the MIA why it offered $85,000 less than its valuation minus the $25,000 already paid.

Attorney’s Fees

Plaintiff used a one-third contingency fee agreement. The MIA rejected this out of hand and assigned what it felt was a reasonable fee and cost award —$12,000.

#InsuranceBadFaith #AutoInsurance #BadFaithClaimHandling #MarylandInsuranceAdministration

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