$22 Million Settlement in Allstate Bad Faith Case

Oct. 13th, 2014   /   ,

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Insurance companies are there to assist you when you need them, right? That’s why people pay insurance premiums, right? As our Palm Beach and Broward County personal injury lawyers know, that isn’t always the case; sometimes, insurance companies simply refuse to pay claims, as was highlighted in the case of Hennessy v. Allstate Insurance Company, which just recently settled.

The case stemmed from an auto accident in Philadelphia in which the victim had to have one of his legs amputated. Allstate refused to pay the $250,000 that the insured, negligent driver’s policy afforded, and, as a result, the plaintiff (the victim), to whom the insured assigned his rights, sued Allstate and obtained a verdict of $19.1 million, which, unsurprisingly, Allstate again simply refused to pay.

Then the case became about their refusal to pay the multimillion-dollar verdict in connection with the judgment entered against them. Eventually, Allstate settled with the plaintiff for $22 million, which encompasses the original $19.1 million verdict plus what are called “delay damages” and interest. Imagine if they had just paid the $250,000 claim; they would’ve been free from this $22 million settlement, which only arose out of the insurance company’s refusal to pay what was a relatively miniscule amount of money for a company whose annual revenue amounts to more than $32 billion.

Our personal injury lawyers know that battling with insurance companies is one of the trickier things to do. As you can imagine, the companies make money by figuring out ways to not pay out claims, even though they gladly accept your monthly premiums, which you pay so that you’ll be insured if you ever have to rely on an insurance claim. Moreover, we all pay insurance premiums as a collective benefit. When you’re travelling on the road, it is reassuring to know that everyone else on the road has auto insurance, so that if another driver acts recklessly and causes an accident, you’ll be covered by the applicable insurance company.

The $22 million verdict speaks volumes about the wrong in this bad faith case; the largest bad faith settlement in Pennsylvania history, it loudly condemns Allstate’s refusal to pay out a claim in what was a catastrophic accident caused in large part by their insured. It seems, based on this situation, that their tagline “you’re in good hands” should read something more like “you’re in shaky or absent hands.”

Feeling powerless against the whims of a giant insurance corporation is truly disheartening. Luckily, as this verdict and subsequent, larger settlement demonstrates, the court system provides an avenue of recourse that an individual can take against an insurance company that they feel has wronged them.

If you’ve been involved in an auto accident and have suffered damages, whether they are economic, mental or physical, please contact our diligent personal injury lawyers at the law offices of Aronberg, Aronberg & Green. We know how to handle insurance companies and personal injury claims, and we can help you obtain the compensation you deserve. To schedule a free consultation at no cost or obligation, please call us at 561-266-9191 or e-mail us at daronberg@aronberglaw.com. We look forward to assisting you. 

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