The aftermath of a car accident can be stressful, if not devastating, for many Washington, D.C. accident victims. Victims of D.C. car accidents often rely on insurance companies to resolve accident claims. But what can accident victims do when an insurer fails to act in good faith to resolve a claim?
Under D.C. law, all contracts, including insurance contracts, contain an implied covenant for all parties to act in good faith. Parties to the contract may be able to recover damages for a breach of contract if a party fails to act in good faith. D.C. courts have not recognized a separate tort of bad faith by insurance companies in the handling of policy claims. However, in addition to breach of contract claims, there may be other claims relating to insurance contracts, such as fraud and negligent misrepresentation. Some states recognize a separate claim of bad faith. One recent case reflects how a claim of bad faith may be interpreted by a court.
In that case, a drunk driver hit a woman’s vehicle at a railroad crossing, causing it to crash into an oncoming train. The woman suffered permanent injuries, and her eight-year-old son was tragically killed in the crash. The other driver was arrested and charged with DUI manslaughter. He later pleaded guilty and was sentenced to 12 years in prison. The insurer of the drunk driver quickly offered a total of $20,000 to the woman and her son’s estate, amounting to the full bodily injury policy limits under the policy.