It’s somewhat surprising, but insurers consistently seem to get themselves in trouble for misrepresenting the scope of their policy coverages to their insureds. Wisinski v. American Commerce, a Pittsburgh federal court case, again proves the point. Wisinski was involved in an auto accident with an uninsured driver on December 20, 2001. She put in a claim with her insurer for first party benefits. The claim was not even partially resolved until 2007 at which point Wisinski commenced a bad faith action against ACIC. During the discovery process, it became clear that ACIC considered its reserves as for “aggravation” only and misadvised Wisinski on the policy limits. The court found this type of behavior was “unreasonable and done either intentionally or recklessly” — http://pdf.wcmlaw.com/pdf/WisDec.pdf. It therefore awarded bad faith damages to Wisinski and turned a small claim into a big problem for ACIC.
If you have any questions about this post, please contact Bob Cosgrove at firstname.lastname@example.org.