Jury Gives $12M Award in Bad Faith Insurance Lawsuit

Albuquerque, NMThe jury in a bad faith insurance lawsuit has given the family of a man injured in a car crash $12 million dollars, after finding that Progressive Insurance Co., practiced bad faith insurance.

According to the Albuquerque Journal (10/ 29/11), Martin Vigil was driving a truck on November 4, 2002, when he lost control of the vehicle and crashed. A man who was in the back seat of the vehicle died while Vigil suffered head injuries. At the time he was driving, he had a suspended license and had reportedly said he had been drinking, although criminal charges against Vigil were later dropped.

Progressive Insurance paid two $100,000 settlements in the case, but later said that Vigil's insurance policy lapsed at midnight on November 4, 90 minutes before the accident occurred. Progressive then sued Vigil for reimbursement of the two settlements. Initially, a judge found in favor of Progressive and the state Court of Appeals upheld the jury's verdict, but the question of coverage and allegations of bad faith insurance were remanded to District Court.

It was at this most recent trial, in District Court, that the jury heard evidence that Progressive altered its computer records 11 days after the crash, to make it appear that the Vigil family did not have insurance coverage. Furthermore, evidence was presented that a member of the Vigil family called Progressive twice before the accident to ensure the policy was valid; she was reportedly told over the phone there was no payment due until mid-November and the policy was fine. Finally, the jury heard that Progressive has a policy of recording all phone calls with clients, but calls regarding the Vigil family were never presented.

The jury awarded the Vigil family $11.7 million in punitive damages for bad faith insurance and a few hundred thousand in compensatory damages.

Insurance companies can face a bad faith insurance lawsuit if they unreasonably deny coverage or benefits, or if they unduly delay processing a claim.

In another recent bad faith insurance lawsuit, a plaintiff was awarded almost $800,000 in her lawsuit against Nationwide Insurance. The plaintiff, Norma O'Neal, lost her home in a fire two weeks before Christmas Day in 2009, according to The Chattanoogan (11/11/11). Despite evidence that an electrical event caused the fire, Nationwide denied O'Neal's claim, arguing the fire was intentionally set by a family member. The jury found in favor of O'Neal, awarding the amount she claimed for the house, contents and living expenses, and also awarding an additional 18 percent to penalize Nationwide.