Assignment Of Bad Faith Cases To Personal Injury Victims

Insurance companies have two important duties to their insureds, the duty to indemnify — to pay claims — as well as the duty to defend the insured. Where a lawsuit against an insured could conceivably result in a covered claim, the insurance company must provide a lawyer to the insured to defend the claim. In addition, the insurance company has an affirmative duty to offer a reasonable settlement on behalf of its insured. Despite these requirements, all too often insurance companies lowball the underlying injured party.

However, if the insurance company fails to settle a lawsuit against its insured within the policy limits and forces the matter to trial, it is gambling with the insured's potential liability. The insurance company has little to lose in gambling that a trial verdict will be less than its policy limits. This conflict of interest gives rise to a remedy that exposes insurers who fail to reasonably settle to liability beyond the policy limits. The insured can assign his or her bad faith claim for failing to settle the suit within the policy limits to the underlying plaintiff. The injured party can then sue the insurance company for bad faith in order to recover the full amount of proceeds and benefits to which it is entitled under such a claim. If the parties can demonstrate that the damages were in fact in excess of the policy limits, then the underlying plaintiff can pursue those damages against the insurance companies in full, despite the policy limits. In this way, the insured and injured parties cooperate to fight back against this insurance company tactic. This is often referred to as "opening up the policy."

Helping Others Hold The Insurance Companies To Their Promises

The Grey Law Firm, PC, devotes its entire practice to fighting insurance companies for their wrongful denials of policy claims. We have extensive experience in collecting on assigned judgments obtained where the insurer failed to settle or failed to defend its insured. The Grey Law Firm, PC, has worked with:

  • Other attorneys, both plaintiffs' and defendants' counsel
  • Plaintiffs and the parties who were injured in an accident
  • Defendants and insureds

In all of these circumstances, The Grey Law Firm, PC, can provide lawyers and lay people alike with a full menu of options with respect to the wrongful denial of insurance claims. The assignment of a bad faith cause of action by the insured to the injured often provides both parties with the results they want, while also deterring insurance companies from failing to reasonably settle cases and gambling with their own insured's money.

Contact A San Francisco Injury Insurance Attorney

To speak with our firm's founding lawyer, Rebecca Grey, about the assignment of defendants' bad faith cases to the personal injury victims themselves, please call 415-766-0653. You can also schedule an entirely free initial consultation with our California firm to discuss your matter by contacting our office online.