Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

Phone: 602-322-4038
Steven Plitt, Expert Witness

Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

MUTUAL MISTAKE IS NOT EXCUSE FOR BAD FAITH

by | Mar 10, 2022 | Bad Faith

Recently, the Kentucky Supreme Court allowed a bad faith lawsuit to proceed forward for alleged delays in resolving a UIM claim, notwithstanding the assertion of mutual mistake regarding the policy.

The Kentucky Supreme Court in Nicholas v. Zurich American Insurance Co., 630 S.W.3d 683 (Ky. 2021), rejected the insurer’s claim that there was a mutual mistake made in issuing its policy.  The insurance company, Zurich American, asserted that a mutual mistake occurred in providing the UIM benefits of the policy because the insured had asked its agent for a policy without UIM coverage, but the agent failed to relay that request to Zurich.  Zurich sought to enforce the intent expressed during the purchase transaction to the effect that there was no UIM coverage intended and, therefore, the policy should be amended.  The Kentucky Supreme Court rejected the insurer’s mutual mistake argument, finding that Zurich American intended to issue a policy with UIM coverage.  Absent the mutual mistake argument, Zurich American could be held liable for denying a UIM claim without a reasonable basis because its policy provided such coverage.

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Steve Plitt