Accident Victim’s Bad-Faith Claim Against Insurance Company Fails Based on Legitimate Dispute of Liability and Causation

Earlier this month, an appellate court in Kentucky issued an interesting opinion that is of interest to anyone dealing with a difficult insurance company after a Maryland car accident. In the case, Holloway v. Direct General Insurance Company, the court determined that the plaintiff’s bad-faith claim against the insurance company, based on the company’s failure to settle her claim, must fail because the insurance company had a legitimate reason to doubt its own liability.

The Facts of the Case

Holloway, the plaintiff, was involved in an auto accident with Sykes. The accident took place in a parking lot and involved low speeds. However, each party had a different account of how the accident occurred. Holloway claimed that she suffered property damage and injuries as a result of the collision, and she sought compensation from Sykes’ insurance company, the defendant.

Holloway made property damage claims as well as personal injury claims. The parties reached a settlement regarding the property damage claims, but settlement negotiations broke down regarding the personal injury claims. Since the insurance company would not settle her personal injury claims, Holloway filed a personal injury lawsuit against the insurance company. One of the claims she made was that the insurance company acted in bad faith when it refused to settle her personal injury claim. If successful, Holloway could potentially receive compensation above and beyond her actual damages through punitive damages.

The court hearing the case issued an opinion in favor of the insurance company. The court explained that an insurance company can only be found to have acted in bad faith if there was no reasonable basis to refuse settlement. However, in this case, the court was persuaded that the insurance company did have a valid claim to dispute Holloway’s personal injury claim. First, the fact that there were two differing accounts of how the accident occurred meant that there was potentially an issue of liability, meaning that Sykes may not have actually been at fault in the accident, and the insurance company would not be obligated to pay.

The other issue was the severity of Holloway’s injuries. The court noted that there was some evidence that Holloway had pre-existing injuries in the same area where she claimed her new injuries arose. That being the case, the court determined that the insurance company didn’t act in bad faith when it refused to settle Holloway’s claim.

Have You Been Dealing with a Difficult Insurance Company?

If you or a loved one has recently been injured in a Maryland car accident, and you have a difficult time dealing with the insurance company in the wake of the accident, you should seek out the assistance of a dedicated personal injury attorney. Too often, insurance companies do not take unrepresented accident victims seriously and try to take advantage of them. Rather than go through the process alone, call 410-654-3600 to set up a free consultation with a dedicated Maryland personal injury attorney. Calling is free and will not result in any obligation to you unless we can help you obtain the compensation you deserve.

More Blog Posts:

Family Loses Lawsuit and Subsequent Appeal in Case Against Smoke Detector Manufacturer, Maryland Accident Law Blog, September 19, 2016.

Plaintiff’s Medical Malpractice Case Successful against Cosmetic Clinic after Liposuction Procedure Resulted in Infection, Maryland Accident Law Blog, September 5, 2016.

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