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Dawson and Rosenthal
Dawson and Rosenthal

GEICO insurance guilty of bad faith, breach of contract

For most people, GEICO Indemnity Insurance CO. (GEICO) is best known for its television commercials involving a computer-animated lizard with a British accent. But the verdict of a recent bad-faith insurance case paints it is an unprofessional and unscrupulous company that dragged out a policyholder’s insurance claim for six arduous years.

The most egregious part? The policyholder was a man who had been severely disabled in a car accident and trusted that GEICO would fulfill its obligations to him.

A six-year battle

Last week, a jury in Orange County found the insurance company GEIGO guilty of several offenses including bad faith, breach of contract and inflicting emotional distress. The case involved a GEICO client who was severely disabled in a car accident in 2009. The man’s injuries were so severe that he had to undergo several surgeries over the course of two years, racking up $125,000 in medical bills. When it was time for his insurance company, GEICO, to pay his claim, the company refused. The resulting legal battle lasted a grueling six years.

Eventually, the man brought civil action against GEICO. On April 12, a jury in Santa Ana found the insurer guilty of delaying payments unreasonably, causing financial loss to the claimant, inflicting emotional and mental harm on the victim and engaging in malicious, oppressive and fraudulent conduct.

The effects of bad faith insurance

This case is an example of just how harmful insurance companies can be to their clients when they act in bad faith. Fortunately, the victim knew that GEICO was violating his rights as a policyholder and that he had legal recourse. The jury awarded him nearly $23 million in damages, including pain and suffering, financial losses and lawyers’ fees. In cases like this, it is crucial for victims to know that they can take legal action against bad faith insurance.