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How far down the chain of command can an insurance suit go?

When Arizona consumers purchase goods or services, they have a right to expect fair and honest treatment from the provider. When they don't get it, the first step is often to work up a chain of representatives until someone does the right thing.

Insurance is a horse of another color. Many consumers don't want it to begin with and many try to avoid filing claims, fearing premium increases. And then there's the reality that insurance companies seek to minimize compensation. Protecting your rights against insurer bad faith becomes another annoyance.

Insurers have clear obligations to policyholders but they have experience and financial resources at hand to leverage every possible loophole. State and federal laws offer protection against bad action and unfair practices, but the processes can be complicated and costly.

Additionally, some state laws don't necessarily give plaintiffs the power to get as granular as they would like when seeking redress. Yes, you can sue the company. However, in some cases you might feel you want to sue an individual representative. The question then is whether the law allows it.

Every state's laws are different, which is why bringing your case to a local experienced attorney is recommended. But a recent story out of Washington state suggests a chink may exist in insurers' legal armor.

In this case, a husband and wife made a claim after a 2007 collision with an uninsured motorcyclist. The couple, citing their uninsured motorist coverage from Allstate, asked for the maximum $25,000 allowed. The company's offer topped out at $15,000. Even though police and Allstate accident reports indicated significant, if not total, fault rested with the motorcyclist, the adjuster claimed the couple was 70 percent to blame.

The couple sued for bad faith, naming Allstate and the adjuster as defendants. A jury subsequently found for the couple and ruled the motorcyclist 100 percent to blame. An appeal followed.

Before sending the case up the jurisdictional ladder for review, the trial court dismissed the claim against the adjuster. But the appeals court reversed that decision, saying the adjuster could be liable for bad faith and remanded the matter back down for further action.

This ruling applies only to Washington. Whether the laws elsewhere might be as favorable is something to discuss with skilled counsel.

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