Geico Pays $8.6 Million In Bad Faith Insurance Suit
Posted December 22, 2015Late last year, a Palm Beach Circuit Court found GEICO liable for committing bad faith when it failed to take reasonable steps to settle a client’s $100,000 claim stemming from an automobile accident.
The Case
In 2006, 51-year-old John Potts was tragically killed when a merging vehicle struck his motorcycle. The at-fault driver, James Harvey, was covered by a GEICO auto insurance policy, which provided $100,000 in damages. The insurance company paid the Potts family promptly, but when they were asked whether Harvey had any additional assets or insurance policies, GEICO refused to provide the information.
Based on well-established regulations, insurance companies are required to make their clients available to discuss this type of information. As a result of the denial, Ms. Potts, the wife of the victim, refused to sign a release for the policy limit.
After further refusals, Ms. Potts subsequently filed a wrongful death claim against Harvey. After hearing the facts of the case, a jury awarded the Potts’ family $8.48 million. After GEICO’s appeal failed, Harvey filed a lawsuit against his insurers, arguing that the company had acted in bad faith. After a two-hour deliberation, a jury agreed, stating that GEICO had acted in bad faith and failed to protect its client, ultimately clearing Harvey of the previous $8.5 million verdict. Instead, GEICO was ordered to pay the amount, which, after accumulating interest, was calculated at $9.6 million.
The Duty of Good Faith
In Oklahoma, all insurance companies owe their clients a duty of good faith and fair dealing. Examples of a failure to uphold these duties include:
- Failing to pay a policyholder or those legally entitled to compensation;
- Inadequately investigating a claim;
- Concealing facts;
- Intentionally misrepresenting policy provisions;
- Failing to disclose benefits to the policyholder;
- Unreasonably delaying payment;
- Insisting on unnecessary steps; and
- Failing to offer a reasonable settlement.
Fortunately, Harvey had an experienced bad faith insurance attorney who was able to hold GEICO accountable for the breach of its duties. If Harvey had not challenged the award, he would still be responsible for paying $8.6 million to the victim’s wife.
Contact Our Legal Team Today
An insurance company’s failure to fulfill the implied duties of good faith and fair dealing can be financially and emotionally devastating for diligent policyholders who have been in an accident. If you or a loved one have been the victim of your insurance company’s bad faith, it is vital that you contact an experienced bad faith insurance attorney who can ensure that your interests are protected. Please contact a member of our legal team at the Bennett Law Firm, at 405-272-0303.