$505,000.00 Car Crash Excess Verdict – St Louis County

What is an Excess Verdict? “Busting the Policy”

An excess verdict occurs when a jury awards damages in a lawsuit that exceed the limits of the at-fault party’s insurance policy. This is often referred to as “busting the policy.”

Can You Get More Than the Insurance Limits? Yes!

While it might seem like the insurance policy limits are a hard cap on recovery, it’s possible to recover more. This happens when the insurance company acts in “bad faith” during the settlement process.

How Does Bad Faith Lead to an Excess Verdict Being Collectible?

An insurance company has a duty to act in good faith when handling claims against its policyholders. This includes:

• Properly investigating the claim: Thoroughly examining the facts of the accident.
• Evaluating the claim fairly: Assessing the potential liability of their insured and the likely range of damages.
• Attempting to settle within policy limits when possible: If the potential verdict is likely to exceed the policy limits, the insurer has a duty to attempt to settle the case for an amount within those limits to protect their insured from personal liability.

When an insurance company unreasonably refuses to settle a claim within policy limits when they have the opportunity to do so, and a subsequent trial results in a verdict exceeding those limits, the insurer can be held liable for the entire judgment, even the portion exceeding the policy limits. This is because their bad faith exposed their own policyholder to personal financial risk.

Example: Our recent $505,000.00 Excess Verdict Case Against State Farm

Your recent case against State Farm is a clear example. Here’s a breakdown:

• The Accident: Our client was injured by a negligent driver who was intoxicated and backed out of a driveway.
• The Policy Limits: The at-fault driver had a $25,000 policy with State Farm.
• The Opportunity to Settle: We offered State Farm the opportunity to settle for the policy limits of $25,000.
• State Farm’s Refusal: State Farm refused and only offered $18,000.
• The Excess Verdict: The jury awarded $505,000, exceeding the policy limits by $480,000.
• Busting the Policy: Because State Farm acted in bad faith by not settling within policy limits when given the chance, they are now potentially liable for the entire $505,000 judgment, not just the $25,000 policy limit.

Why This Matters: Protecting Policyholders

This legal principle is crucial because it protects policyholders from being financially ruined by large judgments when their insurance company could have prevented it. Insurance companies have a responsibility to prioritize their insured’s interests, and when they fail to do so, they can be held accountable.

Key Takeaway: Insurance companies must act in good faith and in the best interests of their customers. When they unreasonably refuse to settle within policy limits and a larger verdict follows, they can be liable for the entire judgment, effectively “busting the policy.”