Compelling action on at fault insurance bad faith delay?

[lyn244]

A family member of mine experienced a scary accident in which a vehicle crashed into their months-old car (

 

[egmiller]

@lyn244 If the property damage coverage of the at fault party is only $25,000 and the vehicle repairs already exceeds 5 figures, they will likely not be any remaining coverage to pay DV.

Edit: there isn't a way to have the carrier prioritize a DV claim above the property damage that hasn't been paid out yet. Triple A isn't attempting to avoid adjusting the DV claim, they simply can't. They are concerned the policy have enough coverage. When you carrier and the other companies submit their bill to Triple A. AAA will divided the $25,000 among all impacted parties. If all the parties went through their own a carrier for repairs, AAA will pay them.

 

[lyn244]

@egmiller Aren’t insurance companies required to evaluate claims together and pro rate them? Are you implying a hierarchy where diminished value claim comes last?

To my understanding, after the pro rating, the parties can still pursue the “underinsured” person for the remaining damages.

 

[egmiller]

@lyn244 They are considering it but the insurance company owes the carriers who paid to repair the damage property first due to the subrogation rules. The car has been repaired to pre collision condition, the DV claim is secondary. If you want to go after the at fault driver, you have the right to. Even with a judgement, there is no guarantee the at fault driver has any seizable assets. I recommend being patient and working with your own carrier for updates on the claim.

 

[resjudicata]

@egmiller Also keep in mind the 17C formula isn’t law in PA they can tell you to kick rocks get an appraisal for DV

 

[bfastpool]

@lyn244 You can't bring bad faith on a third party claim. They have a duty of faith to their insured who they have a contract with, not the third party.

 

[gjames]

@lyn244 The at-fault company is correct. They have received your repair claim from your family’s insurance and they have received your DV claim. However, the building is probably still undergoing repairs and they need time to provide an accurate total. When that’s complete, then they can calculate the prorated settlement amounts. Sorry this is taking longer than you want, but this is in no way bad faith.

 

[lyn244]

@gjames Prior to pro-rating, doesn’t the at fault insurance need to have 3 finalized numbers after a completed investigation for each (car damage, building damage, diminished value)?

I understand that the final payout is dependent on prorating, but they need to investigate each claim independently and come up with numbers to prorate first. The final car repair cost was already presented, and diminished value claim also presented, as well as a preliminary estimate for the building repair. We’re looking for their prompt completion of the investigation into diminished value claim (completion meaning accepting that there is a diminished value, and providing the number to which they agree the value diminished by since they believe the 17c calculated diminished value is too high). That investigation should not be dependent on building final estimate, only the prorating and final payout are dependent on that.

PA law requires insurance to investigate and settle a third party claim within 30 days. It has been 50. That’s why I bring up bad faith, especially since there was no initial response to the claim until 1 month after it was sent. Is my understanding correct that they owe me a completed investigation and settlement prior to pro-rating and payout? And what can I do to compel them to complete the investigation and settlement quickly?

 

[bfastpool]

@lyn244 I don't think you understand bad faith. They don't owe good faith on a third party claim; you don't have a policy contract with them.

If the claim is being investigated or they have a reason for delay, claims can take longer by notifying you once every 45 days.

 

[lyn244]

@bfastpool

The Pennsylvania Courts have long recognized that liability insurers have a fiduciary duty to act in good faith in their settlement or defense of third-party claims against their insureds and may be liable for excess verdicts beyond their policy limits in the event that duty is breached

Source. I’m starting to think legal action is inevitable and that asking Reddit wasn’t the best

 

[bfastpool]

@lyn244

against their insureds

Keywords. They owe good faith to their client for settlement of first party claims or defense of third party claims.

This is not owed to a third party cause there's no contract between you and the insurer. All settlements are voluntary until a court orders it.

 

[lyn244]

@bfastpool So what you’re saying is that there is no recourse for a third party if an insurance company does not investigate their claim against the insured unless the third party first sued the insured who would then have to sue the insurer for bad faith? Sounds absurd and in direct contradiction of what laws binding insurance companies to good faith are meant to do.

 

[bfastpool]

@lyn244 The remedy for the third party is the ability to sue.

As previous stated, anything paid by the insurance company prior to a judgment is voluntary.

Its the way the legal system works.

 

[bfastpool]

@lyn244 From your source:

"Standing To Sue

It appears to be generally accepted that only an insured has legal standing to maintain a bad faith action, though it should be noted that this would presumably extend to any party qualifying as an insured (including additional insureds,) as opposed to only named insureds.

The Pennsylvania Courts have long held that a third-party tort claimant is not a third-party beneficiary of a liability insurance policy, has no standing to maintain a direct action against an alleged tortfeasor’s insurer and that liability insurers owe no duty of good faith to such parties. Strutz v. State Farm Mut. Ins. Co., 609 A.2d 569 (Pa.Super. 1992)."

 

[lyn244]

@bfastpool This changed in 2015: https://www.khflaw.com/news/amp/pen...potential-insurance-bad-faith-actions-easier/

 

[ricetree]

@lyn244 Quit down voting OPs for asking reasonable questions.