When someone purchases an insurance policy, they are essentially entering into a contract with the insurance company. In return for the premium paid by the insured, the insurer will cover certain costs that are outlined in the insurance policy. In auto insurance policies, these costs are usually related to property damage and personal injuries.
Sometimes, however, an insurance company will not agree with the insured on how much the insured should receive on a claim. For example, if an insurance company disagrees with an estimate to repair a car damaged in a car accident, the insurance company may only offer a portion of what the insured spent on the repairs. In some cases, an insurance company will outright deny the claim, refusing to pay anything at all. In Georgia, when an insurance company fails to engage in a good-faith effort to settle a claim, they may be subject to additional damages under what is essentially a breach-of-contract theory. A recent case illustrates one woman’s bad-faith claim against her own insurance company.
Peden v. State Farm: The Facts
Peden was over at a friend’s house for the friend’s birthday celebration. For her birthday, Peden’s friend had received a new car. At some point in the evening, the group of friends got into the car for what they thought would be a photo op. However, once they were all in, the friend’s fiancé got into the driver’s seat and took the car for a joy ride. He was intoxicated.
Needless to say, the fiancé got into an accident, and Peden suffered a serious injury as a result. Both Peden and the driver of the car were insured by State Farm. Peden filed a claim under the driver’s policy, and since that was insufficient to fully reimburse her for her losses, she also filed a claim under her own policy.
State Farm settled Peden’s claim under the driver’s policy, but Peden’s claim under her own policy was denied. State Farm explained that Peden had gotten into the car knowing that the driver was intoxicated, which reduced the value of her claim as a result. Eventually, State Farm did end up paying out on Peden’s claim, but not until she filed a separate lawsuit against the insurance company.
Once State Farm paid, Peden argued that it was unreasonable for the company to delay settling her claim and that they acted in bad faith. A trial court dismissed the claim, but on appeal, the decision was reversed, allowing Peden to pursue her bad-faith claim. The court determined that State Farm did not fulfill its duty to fully investigate the accident before deciding not to pay out on Peden’s claim.
Have You Been Injured in a Georgia Auto Accident?
If you or a loved one has recently been injured in any kind of Georgia car accident, you may be entitled to monetary compensation. However, the reality is that you will almost certainly have to deal with an insurance company before receiving compensation. The skilled personal injury attorneys at Miller Legal Services have years of experience handling clients’ car accident cases and dealing with difficult insurance companies. Do not let a savvy insurance company take advantage of you. Call 770-284-3727 today to set up a free consultation with an attorney to discuss your case.
More Blog Posts:
What Is Arbitration and How Can It Affect a Georgia Accident Victim’s Case?, Marietta Personal Injury Lawyer Blog, November 16, 2016.
Court Permits Case Against School Administrators Following Car Accident on School Grounds, Marietta Personal Injury Lawyer Blog, December 1, 2016.