As the weeks following Sandy have stretched into months, and the months are beginning to stretch into years, businesses and homeowners with unresolved claims have been asking me whether it’s worthwhile to complain about their carrier to the New Jersey Department of Banking and Insurance (“DOBI”). Truth be told, it’s a complete waste of time.
Bad Faith
Toughening New Jersey’s bad faith law
By Gene Killian on
If an insurance company wrongfully denies a third-party liability claim, then, under the New Jersey Court Rules (R. 4:42-9(a)(6), to be exact), if the policyholder has to sue to enforce coverage for the claim, the policyholder is entitled to recover its attorneys’ fees. Due to a weird quirk in the Court Rules, however, a…
Bad Faith and the Duty to Defend
By Gene Killian on
I’m reading a wonderful book right now called “Young Men and Fire,” by Norman Maclean. The book is about a horrific forest fire that took place in Montana in 1949. Amazing how small sparks can result in a conflagration beyond all belief. Those of us involved in the litigation game are familiar with that problem. …
Bad Faith Insurance Claims Handling
By Gene Killian on
Here’s a question that perhaps should be posed to a magician: How can an insurance company turn an $85,000 claim (on a policy with a $100,750 applicable limit) into an $850,000 bad faith verdict? If you’re Merrimack Mutual, apparently it’s quite easy.
I wrote about this case some time ago when the jury verdict first…
Bad Faith and Settlement Negotiations
By Gene Killian on
Here’s an interesting question recently confronted by the Ninth Circuit: Is it bad faith for an insurance company to refuse to initiate settlement discussions in a third-party context when liability has become reasonably clear? The carrier (Deerbrook, an Allstate company) took the position that bad faith could not exist unless the carrier failed to…
Insurance Bad Faith
By Gene Killian on
Posted in Bad Faith
In ethics or metaphysics, the “law of unintended consequences” states that, for any willed action, there are consequences that occur which are not intended. The concept has long existed, but was named and popularized in the 20th century by American sociologist Robert K. Merton.
Merton would have been fascinated by laws that were intended…
Developments in insurance bad faith law
By Gene Killian on
Posted in Bad Faith, Emerging Trends
Awhile back on this blog, we were discussing developments in insurance bad faith law, and I hypothesized that Courts were generally more apt to find bad faith in cases involving a carrier’s delay of benefits, rather than outright denial. But what if the outright denial contains a bald-faced lie, or a deliberate omission? In that…
More on the ERISA “arbitrary and capricious” standard
By Gene Killian on
To many policyholders, ERISA is a government program that simply backfired (sort of like Prohibition). That’s because ERISA considers an insurance company to be a “fiduciary.” Back in 1974, when ERISA was passed by Congress, the lawmakers figured that since the insurance company is a “fiduciary,” it must have the best interests of the injured…
Bad faith law in New Jersey
By Gene Killian on
Posted in Bad Faith
Got into a discussion recently with some of my policyholder counsel friends. They were lamenting the death of bad faith law in New Jersey. When a carrier unreasonably denies or delays paying a claim, the key case is supposed to be Pickett v. Lloyd’s, 131 N.J. 457 (1993), which was written by the late…
The duty of good faith and fair dealing in litigation
By Gene Killian on
Posted in Bad Faith
Really good stuff over at Chip Merlin’s blog about what happens when insurance companies and trial lawyers mislead courts.