Geico’s slogan is that 15 minutes could save you lots of money on car insurance. Perhaps the insurance company could have saved millions of dollars had it spent 15 minutes evaluating the claim of one of its customers.
A California jury has ruled that Geico must pay $23 million to a Southern California man who got the run-around on a car accident claim. The insurer resisted paying for four years. The jury saw through it as a prime example of insurance bad faith.
He had the right insurance, but not the right insurance company
Omar Dauod was injured in an auto collision in 2009. The other driver was at fault, but he had only $100,000 in liability coverage, far short of Mr. Dauod’s medical bills and losses.
Under his own auto insurance policy with Geico, Daoud had uninsured/underinsured motorist coverage (UM/UIM). You probably have this coverage too.
- Uninsured motorist coverage protects you if the other driver has no insurance at all, or if you are injured in a hit-and-run accident. Both of these scenarios are very common in Southern California.
- Underinsured motorist coverage pays the difference if your damages exceed the other driver’s policy limits. This important safety net is frequently invoked in car accident cases.
Four years in limbo, then too little too late
When Dauod filed a claim under his UM/UIM policy, Geico delayed and delayed. They finally paid $400,000 in 2013 – four years later – when an arbitration judge found in favor of Dauod. By then, he had lost his business and been forced to sell his home.
So he filed a lawsuit against Geico for insurance bad faith. Under the law, insurance companies must investigate all claims and make a good faith evaluation under the policy. They cannot deny claims on minor technicalities or, as the apparently happened in this case, endlessly delay payment in hopes the claimant will give up.
The jury has awarded Mr. Dauod $23 million in compensation for his lasting injuries and economic losses, as well as punitive damages for bad faith insurance practices. Hopefully, the victory will make Geico and other insurers more accountable to those they insure.
Do you have adequate insurance coverage?
You may have enough liability insurance to cover the other person if you are at fault. But in our experience, many drivers do not carry enough UM/UIM coverage in the event that the other driver is at fault is not so well-insured.
Find out what your UM and UIM coverage is and whether you should increase it. To paraphrase Geico, 15 minutes with your insurance agent could save you from a huge financial hardship if someone runs into you or your family member.
The jury has awarded Mr. Dauod $23 million in compensation for his lasting injuries and economic losses, as well as punitive damages for bad faith insurance practices. Hopefully, the victory will make Geico and other insurers more accountable to those they insure.
