Nationwide Insurance to Pay Couple $18 Million in Bad Faith Case

A Pennsylvania judge has ordered Nationwide Insurance to pay an $18 million “bad faith” damage award to a family after the company allegedly had the family’s severely damaged vehicle repaired even after an outside appraisal firm deemed that the vehicle should be replaced for safety.

The plaintiffs, Berks County residents Daniel and Sheryl Berg, “took their damaged 1996 Jeep Grand Cherokee to a facility participating in Nationwide Mutual Insurance Co.’s ‘Blue Ribbon Repair Program,’ where one appraiser told them the vehicle’s frame had been too twisted to fix and recommended that the vehicle be totaled,” according to a July 1 story in The Legal Intelligencer. “The Bergs submitted that the evidence showed Nationwide reversed that appraisal without informing them and ordered the vehicle off to another repair facility, court documents said.”

Instead of initially paying for replacement costs for the damaged Jeep, the story reported, Nationwide “knowingly returned them a vehicle with structural damages despite four months of repairs following a collision and then paid millions to drag out the litigation of their disputed insurance claim, according to court documents.”

The plaintiffs alleged that Nationwide dug its heels in the case and fought it through despite the fact that its legal defense bills far outweighed the costs of simply replacing the Jeep.

Earlier, in the first phase of a bifurcated trial, a jury found Nationwide violated the Unfair Trade Practice and Consumer Protection Law in the case, The Legal Intelligencer reported. Later, Nationwide was granted a motion for a directed verdict on the bad-faith claim because the Blue Ribbon Program is apparently not a part of Nationwide’s auto-insurance policy, but a Superior Court ruling later reversed that decision, the story reported. Eventually, the Bergs were permitted to “argue that the jury’s finding that Nationwide violated the UTPCPL was evidence of the insurer’s bad faith.”

Later, Nationwide allegedly admitted that it spent about $2.5 million fighting the case, rather than replacing the Jeep, the story reported.

“Berks County Court of Common Pleas Judge Jeffrey K. Sprecher said that, by paying its lawyers so much, Nationwide ‘screamed to the litigation world that it is ‘a defense-minded carrier in the minds of the plaintiff legal community,'” the story reported. “According to the judge, Nationwide also obstructed discovery in the Berg litigation by refusing to disclose one of its experts’ reports detailing the inadequate repair of the Jeep.”

Also demonstrating bad faith, according to the judge, was Nationwide’s “refusal to purchase and total the Bergs’ Jeep until 28 months after the accident, by which point the Bergs had paid off their lease,” the story reported.

Sprecher also said that had the ill-repaired Jeep ever been sold later to an unsuspecting buyer in such an un-crashworthy state that Nationwide’s “exposure to liability and damages to that innocent third party would have been astronomical,” the story reported.

“The judge issued his verdict, along with a harshly-worded opinion, finding that ‘Nationwide strong-armed its own policyholder rather than negotiating in good faith to compensate plaintiff for the loss suffered in the automobile collision,” the story reported.

Unfortunately, this kind of case in not unusual for victims to have to endure.  Left to their own devices, profit-motive-driven insurance companies often don’t do the right thing. They often don’t live up to their contractual and ethical obligations to pay claims when they are due. Instead, they put their own greedy corporate interests ahead of those of innocent victims.

The judge also ordered Nationwide to pay an additional $3 million in the case for the plaintiff’s legal fees.

Insurance companies exhibit bad faith when they refuse to pay legitimate claims in a timely manner. In the case of an insurance company, an insurer  contracts with a customer through the filing and underwriting of a policy and promises to handle any claims in certain ways, with specific benefits, payments and processes.  If those promises aren’t adhered to and if the company tries to deceive a customer in order to avoid paying legitimate claims, then they are acting in bad faith.  A lawsuit can then be brought against an insurance company for bad faith in handling a claim.

Bad faith is illegal and can cost insurance companies lots of extra damages, as it did in this case.

One lesson to remember in this case is that no insurance company will truly protect and preserve your legal rights. It’s up to your legal team to be sure that you are compensated fairly when someone else hurts you or your loved ones. Choose that legal team wisely to ensure that your family’s interests are well-protected. These kinds of injury cases occur every day when innocent victims are hurt or killed in vehicle crashes through no fault of their own due to the actions or indifference of others.

We here at MyPhillyLawyer stand ready to assist you with your legal case if you or a loved one is ever seriously injured in a vehicle incident or accident anywhere in the United States. We represent the families of victims who die in such tragedies as well, to ensure that their families receive every penny of damages that they are eligible to receive.

Call MyPhillyLawyer at 215-227-2727 or toll-free at 1-(866) 352-4572 anytime and our experienced, compassionate, aggressive team of attorneys and support staff will be there for you and your family every step of the way as we manage your case through the legal system.