Bad Faith: Harvey v. Geico General Insurance Co.

A Florida Supreme Court promoted an insurers duty to their insureds, reinstating a $9.2 million verdict against Geico General Insurance Co. This case stemmed from an accident in which the plaintiff, Harvey, was found liable for the death of a fellow motorist. After owing nearly $8.5 million to the decedent’s estate following suit for wrongful death, Harvey subsequently sued Geico for bad faith and won. Harvey’s bad faith claims rested partially on a lack of communication from the assigned insurance adjusters.

Many believe the outcome of this case will strengthen insureds’ claims in bad faith cases by emphasizing that an insurer cannot escape liability by merely showing compliance with a “checklist” of duties owed to its insureds. In the highly disputed decision, the majority urged that a duty arises because the insured “has surrendered to the insurer all control over the handling of the claim, including all decisions with regard to litigation and settlement,” noting that “the critical inquiry in a bad faith is whether the insurer diligently, and with the same haste and precision as if it were in the insured’s shoes, worked on the insured’s behalf to avoid an excess judgment.”