Maryland Bad-Faith Claims against Insurance Companies

Insurance companies want to minimize the amount they pay out in the event of a claim, and unfortunately, do not always compensate Maryland car accident victims according to what they deserve. If an insurer fails to fairly settle a claim, the insured may be able to pursue a claim of bad faith against the insurer. In a recent case before a state appeals court, the state found the plaintiff could pursue a claim of bad faith against GEICO after it failed to timely pay her insurance claim.

The Facts

According to the court’s opinion, the plaintiff was in a car accident and suffered serious injuries. Another driver caused the car crash, and both she and the other driver were insured by GEICO. The plaintiff made a claim under the driver’s insurance coverage, as well as under her own insurance plan for underinsured motorist (UM) benefits.

After the plaintiff did not receive payment on the claims, she sued the driver and GEICO. GEICO then paid the plaintiff the maximum benefits under the at-fault driver’s policy, but refused to pay the plaintiff benefits under her UM policy. The plaintiff then filed a civil remedy notice (CRN) with the Department of Financial Services, and mailed GEICO a copy. GEICO subsequently agreed to pay the plaintiff her full UM benefits, but the plaintiff’s lawyer did not receive the check and release until almost three weeks later. This was 65 days after the CRN was filed with the Department of Financial Services.

Under that state’s law, if an individual makes a claim of bad faith with the state, the insurer can cure the issue by paying the damages or correcting the issue within 60 days of filing the notice. The plaintiff claimed that the payment was not timely because the insurer did not make payment within the 60 days.

The court noted the notice was filed electronically in this case, and that GEICO was mailed a copy on the same day. However, GEICO argued that the 60-day period should start only when the insurer actually receives notice of the filing. Here, GEICO claimed it received notice eight days after it was filed, and that it paid the claim within the 60-day period. However, the court determined that the claim was filed before then, and that the statute requires only that notice be filed. Accordingly, the court found that GEICO failed to pay the plaintiff within the 60-day period, and that the plaintiff could pursue her lawsuit for bad faith against GEICO.

Bad Faith Claims Against Insurers

Under Maryland law, an insurer cannot unfairly refuse to settle a claim or unfairly settle a claim. An insurance company may unfairly settle a claim in various ways, including:

  • by “misrepresenting pertinent facts or policy provisions” relating to the policy;
  • by refusing to pay “for an arbitrary or capricious reason”;
  • by trying to settle a claim based on an altered application without notice to, or knowledge or consent of the insured;
  • by failing to provide a statement of coverage with each claim paid;
  • by failing to promptly settle a claim if “liability is reasonably clear” under some part of a policy so as to influence settlements under another part of the policy; and,
  • by failing to promptly explain the basis for a denial if requested.

Contact a Baltimore Injury Attorney

If you have been injured in a Maryland car accident and are filing a claim under your insurance policy or another driver’s policy, the insurance company may offer you far less than you deserve. The Maryland personal injury lawyers at Lebowitz & Mzhen, LLC have been negotiating with insurance companies for over 20 years. We can help individuals determine whether a settlement is right for them and advocate on their behalves. If a settlement is not what our client wants, we are prepared to take their case to trial. Having a seasoned legal professional on your side can help you obtain the compensation you need and deserve. Contact Lebowitz & Mzhen today at (800) 654-1949, or contact us online.

More Blog Posts:

Expert Witness Testimony May Be Necessary in Some Maryland Car Accident Cases, Maryland Car Accident Attorney Blog, published February 19, 2019.

Maryland Employers Can Be Held Liable for the Negligent Acts of Their Employees, Maryland Car Accident Attorney Blog, published March 4, 2019.

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