Articles Posted in Insurance Bad Faith

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By law, insurance companies in New Jersey must offer the services they promise. Of course, insurance corporations are highly profitable and it is in their best business interest to refuse claims and to offer inadequate settlements so that they don’t hurt their bottom line. When a company egregiously breaks their duty of good faith and fair dealings by wrongfully denying a claim or reducing the value of a claim, the plaintiff may file a standard breach of contract claim to hold the insurance company liable for their actions.

When motorists in New Jersey purchase an auto insurance policy, they believe that insurance companies will hold up their end of the bargain when it is time for a payout, if the situation calls for it. Drivers pay their monthly premiums with the hope that the money will be there for them when they need it the most. Insurance companies cannot deny your claim unless there is a valid reason for it. If a claim is unfairly denied, a plaintiff can file an appeal or a civil lawsuit.

It is not, however, in the best interest of an injured victim to wait for the claim to be denied before speaking with a skilled Princeton insurance bad faith attorney. Throughout the process of dealing with the insurance company, there may be signs of a future denial. Is the company not returning your calls? Is the company evasive or hard to reach? Is the application process taking longer than expected?

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On January 5, 2010 a New Jersey Appellate Division panel of Judges upheld a lower court’s ruling that Rutgers Casualty Insurance Company acted in bad faith by refusing to settle an underlying lawsuit for its policy limits of $100.000.00. A New Jersey Supreme Court case from 1974 entitled Rova Farms Resort, Inc. v. Investors Insurance Company of America (“Rova Farms”) stands for the proposition that if a plaintiff is willing to settle his or her claim for the defendant’s policy limits, and the defendants’ insurance company, in bad faith, refuses to tender the policy limits, then any excess verdict will not be the responsibility of the defendant, but rather will be the responsibility of the insurance company.

In this recent New Jersey case, a verdict of approximately $186,000.00 was awarded by a jury after trial against Rutgers Casualty Insurance Company’s insured. Rutgers Casualty had a $100,000.00 policy in force on the date of the accident. Because the plaintiff had advised defense counsel of his willingness to settle the case for the insured’s $100,000.00 policy through a Rova Farms letter, the full amount of the verdict was deemed payable by the insurance company.
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