Claims of Bad Faith Against D.C. Insurance Companies

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.

The woman later offered new settlement terms and was conditioned on strict compliance with the terms, including an affidavit from the driver, reimbursement for personal belongings, and releases without “hold harmless” and “indemnity” provisions. The insurer worked on meeting the terms, but the release included a statement that it was a release of all claims, including claims for subrogation. The woman’s attorney responded after the deadline to meet the terms had passed, stating that the release with the subrogation language did not meet the terms and that he viewed it as a rejection of the offer. The insurer responded that the language could be stricken the releases. The woman did not respond and sued the insurer in state court. She was awarded over $10 million.

The woman filed a third-party bad-faith action against the insurer. The court found the insurer did not act in bad faith. The court explained that the insurer quickly offered to settle the claim with the full bodily injury policy limits. The woman’s offer to settle, and the insurer worked to satisfy the demands in the offer. After doing so, when the woman’s attorney disagreed with the language in the release, the insurer stated that the language could be removed from the releases. That court noted that it was especially important that the insurer offered to remove the disputed language. Thus, the insurer did not act in bad faith.

Contact a Washington, D.C. Accident Lawyer

If you or a loved one has been injured in a Washington, D.C. car accident, you may be able to file a claim against those responsible. Holding wrongful actors accountable is an important step in ensuring that other people do not suffer the same harm. The injury lawyers at Lebowitz & Mzhen Personal Injury Lawyers provide aggressive representation to D.C. and Maryland residents who have been injured. They have helped numerous accident victims file claims and pursue the compensation that they deserve. Call them at 1-800-654-1949 or complete the online form to schedule a free, no-obligation consultation.

 

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