While Utah trial lawyers launched a sneak attack Feb. 4 against automobile insurance consumers by introducing then rushing to public hearing a first-party and third-party bad faith bill, SB 88, the bill was pulled by the sponsor last week so that the industry can work with proponents of the bill to explore a compromise.
SB 88 states that a person – arguably a first party and/or third party – may bring a private cause of action against an automobile insurance carrier for an alleged violation of the Unfair Claims Settlement Practices Act and seek an award of actual damages, costs and attorney fees, and punitive damages with no stated cap on the amount of punitive damages that may be awarded by the court.
NAMIC sent an Action Alert to its Colorado members asking that the contact members of the Senate Business and Labor Committee to ask them to protect Utah from becoming a “bad faith battle zone,” where the casualties of war will be innocent insurance consumers.
“SB 88 will turn every auto insurance claim into a possible bad faith lawsuit, and expose insurers to two lawsuits – insurance claim lawsuit and bad faith claim lawsuit – for every insurance claim filed,” said Christian J. Rataj, NAMIC’s Western state affairs manager. “This legislation encourages the ‘padding’ of insurance claims and the tendering of coercive settlement demands; increases insurance defense costs; makes it more difficult for insurers to prevent and investigate insurance fraud; and congests the courts with frivolous lawsuits that will delay the adjudication of meritorious claims.”
Direct questions to NAMIC’s State Affairs Manager Christian J. Rataj.