Close scrutiny: insurance industry focuses on adjuster liability

On Behalf of | Jan 30, 2019 | Insurance Law

America’s insurance industry is currently riveted on the details of an interesting court case from Washington State. That matter centrally spotlights the extension of personal liability in bad-faith litigation.

The key facts of the case can be quickly sketched. An underinsured motorcyclist struck an Allstate policyholder’s vehicle. The biker died in the crash, with the Allstate insured being injured and sustaining material property damage.

The insured filed an underinsured motorist (UIM) claim with Allstate. Company investigators and local police officials agreed that the motorcyclist was responsible for the accident.

Notwithstanding that concurrence, an Allstate adjuster assigned substantial crash responsibility to the policyholder, offering him a small percentage of what he claimed under his UIM policy. The adjuster subsequently bumped up the amount twice, but the insured rejected the offer and took the matter to court.

He prevailed. A jury found the biker 100% at fault and awarded damages far higher than those maximally allowed under the UIM policy.

The policyholder remained irate following the verdict and filed a bad-faith lawsuit against Allstate and the adjuster. The trial court dismissed the adjuster from the case, but an appellate panel reinstated that individual as a defendant. It ruled that an employee as well as a corporate entity can be targeted and held liable for purposeful wrongdoing.

A national article spotlighting the case notes that it has reportedly “sent shock waves within the claim industry.” A commentator stresses that adjusters are understandably concerned because “they don’t [personally] have deep pockets to pay a judgment.”

We will keep our readers across Louisiana and elsewhere duly informed of any material updates that occur in the matter. The publication Claims Journal stresses that the appellate court’s ruling could potentially be appealed.