Bad Faith Auto Insurance Practices Lead To $55M AZ Jury Verdict Against MetLife
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UPDATED: Sep 16, 2020
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An Arizona jury recently ordered insurance giant MetLife to pay an Arizona couple over $55 million for refusing to cover an automobile claim. The majority of the verdict represents punitive damages against the insurer for bad faith insurance practices.
Arizona bad faith insurance case
This bad faith insurance case involves an Arizona couple whose brand new Ford Explorer was stolen from a parking lot in 2002. It was found abandoned and totaled in Mexico a few weeks later. They filed a claim with their insurance company, MetLife, for what they owed on the car (approximately $30,000), but the insurer decided to only paid them $10,759 and stopped payments for a rental car. They sued MetLife for bad faith insurance practices and were awarded $155,000 in compensatory damages. But that’s not all they received:
Jury awards couple an extra $55 million
Yes, $55 million – and it was all due to the experience of their attorney. At the trial, their lawyer produced documents which showed that this division of MetLife told their claims representatives to keep claim payments low as the company wanted to significantly increase profits that year. In fact, the division sought to triple their profits from approximately $50 million in 2001 to $150 million in 2002 and put extreme pressure on staff to achieve that goal, which translates into denying and reducing valid claim payments.
Their attorney was also able to show that MetLife’s policy was to fully reimburse policyholders whose new vehicle had been totaled within a year of its purchase – something MetLife representatives failed to tell the couple.
Finally, their attorney was also able to show that the company’s claim practices were severely lacking. In fact, senior MetLife management never read letters from the couple about their claim and delegated their responsibilities to other less-senior staff – who also never read them.
Put those all together and it’s hard not to see how Met Life acted in bad faith. Luckily, the couple hired an experienced bad faith insurance attorney to represent them. Otherwise, they may have walked away with less. Millions less.