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Complaint 5 of 5 in "Fraud Issues"

Insurance Carrier: Nationwide
State: Michigan

Consumer Complaint:

On October 28, 2008 my 2008 Dodge Charger was stolen. It took the insurance company all most to months to find the vehicle. And I was still paying insurance for a vehicle I didn't have.  I hired an attorney after about a month or two. After he suddenly had a heart attack, his other attorney of the office handled the case. At this point it was near 4-5 months time after my vehicle was stolen. The previous attorney wanted a start up fee of $500.00 that was paid. Then after he died, his partner notified us of the charges being $200/hr. Couldn't afford this. The attorney basically said he would take us up until the decision with no money. Attorney repeatedly said they were going to deny the claim. After about 6 months of pain and suffering from no vehicle the insurance company denied the claim based on misrepresentation.

Insurance Expert Answer:

This involves a bunch of issues and a lot of bad luck on your part. The key issue is (1) whether you did in fact make a material misstatement in your application that would justify the insurance company's denial of your claim. (2) If you did not make a material misstatement justifying denial, did the insurance company and/or adjuster engage in bad faith by delaying and then denying your claim, and if so, (3) what compensatory damages would flow from that beyond the value of the car, and if so, (4) what punitive or exemplary damages might be appropriate and sustainable under recent US Supreme Court decisions. These are very factually intensive matters.

While it's easy to claim bad faith, few lawyers have the experience to handle an insurance bad faith case and bring it from claim to successful result and large damages. The recent Supreme Court decisions limit the amount of punitive damages that can be recovered. So increasingly even the best bad faith lawyers do not want to handle most of these potential cases on a contingency basis where the actual damages are modest. The cases are incredibly intensive to investigate and prepare, and the return at the end of the day is not large enough for the risk, expense and effort.