Archives for Extra-Contractual Damages

NJ Court Denies Insured’s Attempt to Reform Policy Post-Accident to Increase UI/UIM Benefits

In Drysten v. Chiesa and USAA, the Appellate Division of the New Jersey Superior Court found that the insurer was immune from suit under the New Jersey statute governing immunity for insurers based on the insured’s election of motor vehicle coverages. While the insured attempted to gain additional benefits by having the policy reformed post-accident, the court determined that the insurer’s strict compliance with the statutory requirements and the insured’s breach of her duty to read insurance documents and alert the insurer as to any inconsistencies in coverage, resulted in a finding of immunity for the insurer. Plaintiff was injured
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Federal Court In Kentucky Refuses to Allow Insurer to Assert Reverse Bad Faith Claim

This week the United States Sixth Circuit Court of Appeals declined to allow State Auto Property & Casualty Co. to assert a reverse bad faith claim against a policyholder who admitted to submitting a fraudulent insurance claim after conspiring to burn her own house down. The federal appellate court concluded that Kentucky law does not recognize an action by an insurer against an insured for reverse bad faith. Fortunetly for insurers, many other states and jurisdiction (such as Pennsylvania for example) do recognize a reverse bad faith cause of action action, which allow insurers to recover their costs and expenses,
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Pennsylvania Supreme Court Authorizes Assignment of Statutory Bad Faith Claims to Third Parties

In a landmark decision, the Pennsylvania Supreme Court has held that claims under the Pennsylvania insurance bad faith statute may be assigned to third parties. This decision will enable plaintiffs who have obtained an excess verdict against a policyholder to not only pursue a common-law bad faith claim against the liability insurer for the excess verdict, but also pursue a statutory bad faith claim for punitive damages, attorney’s fees, interest, and costs. The Supreme Court’s decision in Allstate Prop. and Cas. Co. v. Wolfe answered a question certified by the United States Court of Appeals for the Third Circuit in
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