How will an insurer stall during legal proceedings?

We know that some insurance companies will go to extraordinary lengths to avoid paying otherwise legitimate claims, so it should not be surprising when they are less than ardent about answering discovery requests.

The process of discovery is very important when litigating insurance bad faith cases. Essentially, an aggrieved plaintiff is allowed to request information concerning the insurer’s guidelines with regard to responding to claims, its agreements with contractors investigating loss claims, information concerning loss ratios, as well as any other relevant information.

An insurer may object to this as a “fishing expedition” that is not rationally related to the procurement of relevant evidence. This may be expected because a “wide net” could yield damaging information. An insurer may also claim that discovery should be limited when multiple claims are brought (insurance bad faith with a breach of contract claim, for example) in the hopes of prolonging litigation of the most lucrative claim so that a plaintiff may give up or run out of money.

Despite these hopes, a court may be inclined to decline such a request, especially when the claims are so closely related that one set of evidence may satisfy inquiries into both. A recent U.S. District Court ruling exemplifies this notion.

The court rejected the insurer’s request to separate the bad faith and breach of contract claims, reasoning that consolidation achieves the aim of “promoting expeditious resolution” of the case because both claims required the same body of evidence and testimony from the same set of witnesses.

If you are having difficulties with an insurer or suspect that bad faith is behind the rejection of a claim, an experienced insurance law attorney can help.