Appeals Court Says Insurance Adjusters Can be Liable for Bad Faith

Posted on behalf of RizkLaw on May 09, 2019 in Insurance Issues

taking notes after car crashWashington State law says individual insurance adjusters cannot be held liable for bad faith or other violations of the Consumer Protection Act (CPA). However, last year’s Court of Appeals ruling in Keodalah v. Allstate Ins. Co. is in direct conflict with that law. The court found the bad faith statute in Washington applies to all individuals and that they owe the same duties to claims as their employers do.

If you or a loved one has sustained an injury in a car accident and you are having a problem with an insurance adjuster, it is crucial to contact a Vancouver car accident lawyer at Rizk Law for assistance with the claim. We can review your case and determine if the insurance carrier is acting in bad faith and how to pursue the compensation you deserve.

What the Case is About

The Keodalah case started as a typical accident case involving an uninsured motorist. The victim was injured in a collision with an uninsured motorcyclist in an intersection.

The motorcycle was traveling between 60 and 74 mph person in the intersection where the crash occurred. According to the police report, multiple witnesses and Allstate’s accident reconstruction company, the victim was not on a cellphone and had stopped at a stop sign before moving into the intersection.

The victim wanted his insurance company to pay out the maximum of $25,000 from his policy’s underinsured motorist coverage. However, the carrier offered just $1,600, claiming the victim was 70 percent at fault for the incident.

The victim asked for an explanation about the claim of 70 percent liability and Allstate raised its offer of compensation to $5,000. The victim chose to sue Allstate for the full value of his underinsured motorist coverage. Allstate designated the adjuster as its representative in court and this person said the victim ran the stop sign and was using his cellphone when the crash occurred. The jury found the motorcyclist was 100 percent liable and awarded the victim more than $100,000 in damages (injuries, lost wages and medical bills).

After the decision, the plaintiff filed a bad faith lawsuit against Allstate, but the trial court dismissed the case. However, the trial court submitted the case for discretionary review on whether the insurance adjuster could be held liable for bad faith and violating the CPA.

The Court of Appeals found that state law imposes a duty of good faith on everyone involved in insurance, and person means any individual. The court said the adjuster’s breach of duty to act in good faith could subject her to legal liability.

What Could the Impact of this Ruling Be?

The appellate court declined to address whether the adjuster could be liable for bad faith based solely on his or her conduct during litigation, considering Washington law saying witnesses are absolutely immune from suit based on their testimony in court. This means the adjuster could potentially escape liability if the case goes back to trial court.

However, this case could have a huge impact on future cases by empowering accident victims to pursue second lawsuits that could provide additional damages. Insurance company employees could be named as other defendants in the case if they played a role in a coverage decision. Ultimately, this could cause plaintiffs to require the cases to be heard in state instead of federal court to take advantage of this rule. However, the decision could also increase the costs of litigation. The decision could also affect employment agreements between adjusters and the insurance company and indemnity agreements.

Contact an Attorney if You Were a Victim of Insurance Bad Faith

If you were injured in a car accident and the insurance company has denied your claim or is not communicating with you about it, it is vital to contact Rizk Law for support. We can communicate with the carrier and review your case to assist you in pursuing the full amount of compensation for your claim. We can gather evidence, assess your injuries, collect your medical documentation and analyze all evidence related to the accident.

When you contact us, we will review your case during a no-obligation consultation. We work on a contingency-fee basis, so you do not pay us anything unless you win your case or receive a settlement. Contact us today to help start your claim or work through your denial.