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Massachusetts Appeals Court Looks at Unfair Settlement Practices Claim in Underinsured Car Accident Case

After a Massachusetts car accident, the costs can add up quickly. Even if the driver causing the accident has auto insurance, his policy limits can fall woefully short of covering medical bills stemming from the accident. Drivers and policy holders can then look to their own auto insurance policy for uninsured/underinsured coverage to make up the difference. Whether paying for an accident caused by an insured or paying for an injured party, insurers are ultimately interested in minimizing their costs and payouts. To mitigate this, the Commonwealth’s General Laws require an insurer to follow fair settlement practices. If an insurer fails to do so, the injured person can file suit, alleging the insurer committed an Unfair Claim Settlement Practice. Foggy viewA recent Appeals Court decision (16-P-509) addresses this type of lawsuit by assessing what an injured insured must produce for this claim to move forward against an auto insurer.

An injured Massachusetts resident filed suit against her auto insurance company following an accident with another vehicle. Liability was undisputed, and the injured woman accepted the $25,000 limit of that driver’s policy as a settlement of her claim. The injured woman also filed an underinsurance claim with her auto insurer, but no settlement was offered by her insurer. The injured driver ultimately filed suit to compel her insurer to arbitrate the dispute about the amount of damages she suffered from the accident, in addition to a claim for unfair settlement practices, based on the absence of any settlement offer. The injured woman was allowed to go to arbitration regarding the accident-related damages, which were assessed to be $50,000. The amount was confirmed by the presiding judge, who allowed the injured person to pursue the unfair settlement practices claim.

The trial court judge made several findings at the jury-waived trial, pointing out that the injured person offered a lot of proof regarding the damages related to the injury, but no evidence about the insurer’s investigation, nor evidence about which type of settlement negotiations occurred between herself and her insurer. The trial court found the woman also failed to show which damages she suffered as a result of the insurer’s failure to offer a prompt settlement of the claim. The injured woman argued the judge erred by allowing the insurer’s motion to exclude three of her witnesses, who were all the defendant’s employees. The Appeals Court found no abuse of discretion and affirmed the trial court’s refusal, based on the injured person’s late disclosure of witnesses.

The injured person also argued that the settlement for underinsured benefits should have been prompt, since liability was never contested. The trial court disagreed, finding the insurer had reason to be skeptical about the injured person’s alleged damages. The Appeals Court agreed the trial court’s finding was supported by the evidence presented at trial and was not clearly erroneous. The judgment was affirmed, and the injured woman was foreclosed from pursuing damages for unfair settlement practices in addition to the damages she already received for her injury.

If an insurer does not offer a settlement in a timely fashion, an injured party can face serious consequences. Delayed uninsured/underinsured payments from your insurer may cause a series of financial hardships. An injured party may put off medical care because funds were not available or make a Sophie’s choice between paying living expenses or paying medical bills. The Massachusetts car accident attorneys at Karsner & Meehan can guide you through the complex world of personal injury litigation. Contact our office today for a free, confidential consultation at 508.822.6600.

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