Bad-Faith Insurance Claims Following Virginia Car Accidents

Every motorist in Virginia is required to obtain a certain amount of car insurance. The idea behind this requirement is to ensure that anyone injured in a Virginia car accident will have a means of recovering compensation to help them cover the costs of the injuries they sustained in the accident.

Car insurance companies, however, operate on a for-profit basis and rely on taking in more money in monthly premiums than they pay out in approved claims. Thus, it is not uncommon for an insurance company to deny borderline cases in hopes that the accident victim will not file a personal injury lawsuit.

Virginia lawmakers have enacted a law to discourage insurance companies from acting in bad faith, contained in the Code of Virginia section 8.01-66.1. Under section 8.01-66.1, an insurance company that is found to have denied “a claim of $3,500 or less in excess of the deductible” in bad faith is liable to the insured for double the amount otherwise due. This law applies both to the insured that is named in the policy as well as to any third parties injured by the insured’s negligence.

In order to establish bad faith, a plaintiff must present their case to a court. In a recent case, a court agreed with the plaintiff that the insurance company may have acted in bad faith, and the case was sent to a jury for a final determination on the merits.

The Facts of the Case

The case was unique in that it involved a claim against an insurance company by the estate of the insured. Thus, the plaintiff in this case was the estate of a man who caused a serious car accident that resulted in his own death. The accident also injured several others.

The accident victims filed a claim against the deceased driver’s insurance company and offered to settle the claim within the policy limits. However, the insurance company never responded. Eventually, the victims rescinded their offer, and the case went to trial, at which a verdict in excess of $5 million was returned.

The estate of the motorist who caused the accident – which was responsible to pay out the large award – filed a bad-faith claim against the driver’s insurance company, arguing that the company had the opportunity to settle the case for far less than the jury’s verdict, but it negligently failed to do so. The insurance company sought to dismiss the case, arguing that there was no evidence of bad faith, but the trial court denied that motion. The insurance company appealed.

On appeal, the court agreed that the estate provided sufficient evidence that the case should be submitted to a jury for resolution. The court explained that the insurance company’s failure to respond may have risen to the level of bad faith, and a jury would ultimately need to make that determination.

Has Your Claim Been Denied by an Insurance Company?

If you have recently been in a Virginia car accident, and you are dealing with a difficult insurance company, consider calling Attorney Charles B. Roberts, P.C. Attorney Roberts has decades of experience representing Virginia car accident victims and their families in cases against insurance companies, and he has a track record of success. Attorney Roberts provides free consultations to accident victims, at which he discusses potential options and what he can do to help. To learn more, call 703-491-7070 to schedule your free consultation today.

See More Blog Posts:

What Injury Victims Need to Know About Virginia’s Recreational Use Statute, Virginia Injury Lawyers Blog, February 20, 2018.

Court Applies the “Continuing Storm Doctrine,” Dismissing Slip-and-Fall Plaintiff’s Case, Virginia Injury Lawyers Blog, February 1, 2018.