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Dog Bite Case turns into Million Dollar Insurance Bad Faith Settlement

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When an insurance company refuses to honor its insurance contract with a policy holder, delays in paying on legitimate claims, and/or refuses to reasonably settle claims and exposes its insureds to personal financial risk, it can constitute bad faith insurance practices . This type of misconduct warrants legal action by the policy holder against his or her own insurance company in order to remedy the wrong and to punish the carrier for ignoring the rights of its insured.

In a recent case handled by our office, our client was abandoned by his insurance company and left hanging out to dry when the carrier denied a dog bite claim brought against him and refused to provide him with a lawyer or legal defense when he got sued. As a direct result a judgment was taken against him for $2.1 million by the victim when the claim could have been settled for his insurance policy limits of $100,000. We were hired by the dog owner to sue his own insurance company for the damages resulting from the breach of its insurance contract, indifference to the rights of its insured and its bad faith practices. A settlement was reached before trial in the amount of $2.4 Million.

Tragically our client's dog unexpectedly attacked a guest in his home biting off her lip. When the claim was reported to his insurance carrier State Auto Mutual Insurance Company, it was denied despite his desire to have the insurance company process this horrible claim to compensate this young woman for the severe injuries she suffered. When our client was subsequently sued by the dog bite victim the insurance company refused to provide him a defense under the terms of his contract of insurance despite the contractual and legal obligation to do so.

The dog owner had to hire his own lawyer at his own cost to defend himself. Despite the defense the trial court entered a judgment against him in excess of $2.1 Million. The injured victim later testified that she would have settled for the insurance policy limits of $100,000 had the insurance carrier offered to settle the case. Legal investigation during the case revealed that the insurance carrier had a checklist of items to avoid doing to prevent bad faith insurance practices, which went largely ignored in this instance.

In short, do not be afraid of challenging the unilateral decisions of an insurance company or its decision making process. The last word does not lie in the hands of the executives sitting in the ivory tower but rather with a jury of our peers who will level the playing field and remedy unlawful conduct by greedy insurance companies who choose to act in their own best interest rather than under their legal duty to their policy holders.

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