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ALLEGED BAD FAITH FAILURE TO ADVISE POLICYHOLDER OF CONSEQUENCES OF SETTLEMENT CONDUCT CAUSES INSURER TO SETTLE $22 MILLION LAWSUIT

Progressive recently settled a bad faith lawsuit with the guardians of a child injured in a car accident driven by a Progressive policyholder, Earl Lloyd. Progressive faced liability for an underlying judgment in excess of $22 million against Lloyd, who had purchased a $10,000 auto policy from Progressive. The bad faith lawsuit alleged that Progressive failed to advise its insured regarding the significance of executing a financial affidavit. Had the insured executed the financial affidavit, the claimant allegedly would have accepted the insured’s $10,000 policy limits in exchange for a release of Lloyd. The case, Wallace Mosley v. Progressive American Insurance Company, was set for trial beginning December 10, 2018 in the U.S. District Court for the Southern District of

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The Florida Supreme Court Pushes Florida Bad Faith Standard Closer to Negligence in Harvey v. GEICO Decision

The Florida Supreme Court recently decided Harvey v. GEICO Gen. Ins. Co., No. SC17-85, 2018 WL 4496566, at *1 (Fla. Sept. 20, 2018), an important case setting forth what many will try to argue has lessened the standard for bad faith law in Florida to one of negligence plus. The case has a detailed but uncomplicated factual history. However, the factual summary contained in the majority’s opinion must be read along with that of Justice Canady’s dissent in order to understand the full picture factually. On August 8, 2006, GEICO’s insured, James Harvey (“Insured” or “Mr. Harvey”), was in a motor vehicle accident. The accident resulted in the fatality of the other driver, and Mr. Harvey was at fault. Mr.

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Florida Alert: Can a Liability Carrier be Sued for Bad Faith when Its Insured Was Not Exposed to Liability In Excess of the Policy Limits?

The Third District Court of Appeals finding recently held that in certain circumstances, a third party can maintain a bad faith claim against an insurer even if the insured is not exposed to liability in excess of the policy limits.  The insurer, claiming that the decision is in direct contradiction to established Florida Supreme Court precedent and other precedential decisions, petitioned the Florida Supreme Court to review the decision.  See Infinity Indemnity Insurance Company v. Delia Reyes, et al., Case No. SC17-659 (Florida, April 26, 2017). The bad faith lawsuit arose out of an auto accident case.  Delia Reyes was involved in a car accident with Jorge Arroyo, Jr., who is now deceased.  Reyes filed a personal injury lawsuit against

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Florida Regulators Approve Policy Language Aimed at Limiting “Assignments of Benefits” Claim Practice

Insurance companies that write property risks in Florida are getting in line to request approval from the Office of Insurance Regulation (OIR) for two key policy revisions intended to control losses from a water damage property claim practice called “assignment of benefits.” Many insurers have attributed the rising costs of water claims in Florida to an increase in the use of assignments of benefits (AOBs).  This practice occurs primarily in the residential homeowners’ context and involves a situation where, following a water damage event, the insured assigns its rights and benefits under its insurance policy to a third-party contractor or water mitigation company.  The water remediation contractor then bills the insurance company directly with rates that often substantially exceed the

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Florida High Court – UM Insured Entitled to Liability/Damages Determination Before Filing Bad Faith Action

Petitioner Adrian Fridman (“Fridman”) was injured in an automobile accident involving an underinsured motorist. Fridman filed a claim with his uninsured/underinsured (UM) insurance carrier (Insurer) for the $50,000 limits of his UM policy.  After the Insurer refused to pay the policy limits, Fridman filed a complaint against the Insurer to determine liability under the UM policy and the full extent of his damages.  One month before trial, the Insurer tendered a check to Fridman for $50,000 and filed a confession of judgment for that amount seeking entry of the confessed judgment and a dismissal.  Fridman opposed the entry of a confessed judgment, arguing that a jury verdict would determine the upper limits of Insurer’s potential liability under a future bad

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Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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