If you are in an auto accident, and the at-fault driver does not have insurance or enough insurance to cover your damages, you, as a policyholder, can look to your own car insurance for coverage under your Uninsured/Underinsured Motorist (UM) provisions. UM policies can help relieve the burden of medical expenses and lost wages, but only if all of the coverage available to you is actually paid. If an insurance company fails to uphold its contractual obligation to pay for claims covered under the policy, a bad-faith action may be filed if the insurance company does not use diligence and care in the investigation and evaluation of the claim, as required by state law. The federal Eleventh Circuit Court of Appeals recently looked at a bad-faith claim in Cadle v. Geico General Ins. Co. (No. 15-11283) to determine whether or not the District Court erred in granting a judgment as a matter of law to the insurance company.
In this case, a woman was rear-ended by a man on I-95. She was insured with a stacked UM policy with a $75,000 limit. The at-fault driver only had a policy with a $25,000 limit. Following the accident, she sought treatment for her pain, but nothing provided relief. The injured woman had previously been in a car accident 18 years before, but she had been doing well prior to the accident at issue. The injured woman’s pain continued for the next several years, ultimately resulting in a surgery that removed the 20-year-old facet in her neck and replaced it with a larger facet to stabilize her neck. The cost of all the pain management and surgery totaled over $120,000.00. The insurance company requested the medical records for the care from that accident, and upon review, it only initially offered $500 to settle her UM claim, later increasing it to $1,000. After 2 1/2 years of claims and requests for information, the insurer served the injured woman with a proposal for settlement. The case went to trial in Florida’s state court system, where the jury awarded $900,000, off-set by collateral sources and prior bodily injury settlement. The judge then limited the gross verdict to the amount of the UM policy limits of $75,000 but noted that she was free to pursue other causes of action, including a bad-faith cause of action.
At the federal bad-faith trial, the insurance company provided an expert witness who testified the insurance company did not receive any medical record stating the woman had suffered a permanent injury from the accident. At the end of the trial, the insurance company moved for a directed verdict, stating that the injured woman failed in her burden of proof to show that the insurance company did not accept her demand for the policy limits in the UM benefits. The trial court ultimately agreed with the insurance company, finding that the injured woman and her counsel should have provided the medical records to the insurance company. The federal trial judge ruled that the insurance company was not obligated to conduct their own medical examination to determine a permanent injury. The Circuit Court of Appeals agreed with the District Court’s determination that there was no evidence presented at the trial to show that the insurance company had notice of her permanent injury and therefore was obligated to offer a settlement. Since the injured woman already received economic damages through the payments of PIP, the at-fault driver’s insurance limits, and her own UM policy limits, the judgment as a matter of law was upheld, and she did not receive any additional damages, due to the lack of proof she suffered any permanent injury.