RECOVERABLE DAMAGES AGAINST AN INSURER IN A SUBSEQUENT BAD FAITH ACTION

By Scott A. Marks

THIS IS EXCERPT ONE FROM A LECTURE ON INSURANCE COMPANY BAD FAITH GIVEN BY ATTORNEY SCOTT MARKS.
For more information on Insurance Company Bad Faith Problems, please visit Scott A. Mark’s website or call 1-888-638-2693.

An insured’s action against his or her carrier based upon the unreasonable handling of an UM/UIM claim is considered a “first party” bad faith action. The gravamen of a first party lawsuit is a breach of the implied covenant of good faith and fair dealing by refusing, without proper cause, to compensate the insured for a loss covered by the policy or by unreasonably delaying benefits due under the policy.Recoverable damages in a first party bad faith case include compensatory damages for economic loss including attorney fees and emotional distress. If the insurer’s conduct was malicious, oppressive and/or fraudulent, punitive damages are also recoverable.In UM/UIM cases, the economic loss is usually quite modest as it consists of the difference in the attorney contingency fees and arbitration-related costs. If an insured cannot show any economic loss there can be no recovery for emotional distress damages. In other words, emotional distress damages are recoverable only in cases where the insured has suffered a financial loss. However once the economic loss is shown, a plaintiff is entitled to recover for all emotional distress caused by the insurer’s bad faith conduct without proving a causal link between the emotional distress and the financial loss. An appellate court rejected the insurer’s contention that emotional distress damages were only recoverable when the distress flows from a substantial economic loss caused by the insurer’s conduct:

A plaintiff in a bad faith case must provide some economic loss as a means of validating the seriousness of his or her emotional distress. Once economic loss is shown, however, the plaintiff is entitled to recover for all emotional distress proximately caused by the insurer’s bad faith without proving any causal link between the emotional distress and the financial loss.”

An insurance company’s unreasonable conduct which causes its insured to experience anger, anxiety, humiliation and frustration is sufficient to support an award for emotional distress damages

The Los Angeles Personal injury lawyers of The Marks Law Firm Specialize in Representing Those Experiencing Insurance Company Bad Faith Problems. Mr. Marks has achieved superior results in serious personal injury cases and is a particularly effective insurance bad faith attorney. The Firm has assists residents throughout Southern California including Los Angeles, West Los Angeles, Encino, Woodland Hills, Sherman Oaks, Tarzana, Santa Monica, Reseda