Insurance Coverage Disputes

Vermont injury lawyer Chris Maley represents individuals in claims arising from disputes with insurance companies and agencies. Such claims involve instances where an insurance carrier wrongfully refuses to pay the Vermont claimant. The insurance claims include:

  • Refusal to pay an appropriate amount under an insurance policy
  • Failure to procure the appropriate amount of insurance coverage
  • Denial of benefits of uninsured and under-insured motor vehicle insurance policies
  • Wide variety of claims wrongfully denied by insurance companies.

Please contact Chris by email or call collect at (802) 489-5258 for a free initial consultation and case evaluation.

Vermont Law Pertaining To Insurance Bad Faith

Vermont recognizes a claim for tortious bad faith brought by an insured against its own insurer when an insurer not only errs in denying coverage, but does so unreasonably. Bushey v. Allstate Ins. Co., 164 Vt. 399, 402 (1995). To establish a claim for bad faith, a plaintiff must show that (1) the insurer had no reasonable basis to deny the insured the benefits of the policy, and (2) the company knew or recklessly disregarded the fact that it had no reasonable basis for denying the insured's claim. Id. As a necessary prerequisite, however, the plaintiff and defendant must have an insured/insurer relationship by virtue of a policy. Kirkpatrick v. Merit Behavioral Care Corp., 128 F.Supp.2d 186, 191 (D. Vt. 2000).

Vermont also recognizes a contractual bad faith claim based on a violation of the covenant of good faith and fair dealing. "The implied covenant of good faith and fair dealing exists to ensure that parties to a contract act with 'faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.'" Carmichael v. Adirondack Bottled Gas Corp., 161 Vt. 200, 208 (1993). (Quoting Restatement (Second) of Contracts § 205 cmt. a (1981).) However, "an action for ...breach [of a covenant] is really no different from a tort action, because the duty of good faith is imposed by law and is not a contractual term that the parties are free to bargain in or out as they see fit." Id.

Whether the claim is for tortious or contractual bad faith, an insured/insurer relationship is still prerequisite to sustain the claim. The overwhelming majority of jurisdictions follow exactly the same rule Vermont does: the duty of good faith and fair dealing "arises solely because of the presence of the insurance contract." Greene v. Stevens Gas Serv., 177 Vt. 90 (2004).

Uninsured and Underinsured Claims

Most motor vehicle insurance policies include coverage for injuries caused by uninsured and underinsured drivers. Therefore, if you, a family member or a passenger in your vehicle is injured due to the negligent operation of a driver without insurance or with inadequate insurance coverage, a potential claim against your own insurance policy or the policy of residents in your home may exist.

Many vehicles in Vermont are only insured up to $25,000 or $50,000. Given the cost of medical care and lost wages that often result from injuries sustained in automobile accidents, this amount of coverage may be insufficient. In instances where the damages exceed the amount of coverage of the negligent party, a victim may be able to make a claim against the Underinsured Motorist Coverage portion of the insurance policy of the non-negligent party.

There are many legal nuances to determining how much insurance coverage may be available to compensate victims of motor vehicle accidents. Often more than one insurance policy is involved. Caution should be exercised even when communicating with your own insurance company when there is a question regarding who will pay for the harm caused by a car accident. It is best to speak with a qualified personal injury lawyer prior to such communications.

The Vermont personal injury law firm of Maley and Maley can help you understand the intricacies of insurance coverage questions, and pursuing an underinsured or uninsured claim.

To discuss an insurance coverage dispute, please contact Chris Maley by email, or call collect at (802) 489-5258 for a free initial consultation and case evaluation.

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