In State Farm Mutual Auto. Ins. Co. v. Jakubowicz, 56 N.E.3d 617 (Ind. 2016) the Supreme Court of Indiana struck down State Farm's suit limitation clause in its UIM policy which imposed a three-year deadline for pursuing UIM benefits because it conflicted with the policy's requirement to exhaust the tortfeasor's liability coverage which created an ambiguity.
The California Supreme Court in Barickman v. Mercury Casualty Co., 2 Cal. App. 5th 508 (2nd Dist. 2016) held that the insurance carrier was liable for bad faith failure to settle, notwithstanding the fact that the carrier offered its policy limits to the claimants in a timely manner in exchange for a full release of civil liability. The court found that the insurer's failure to do "all within its power to effect a settlement" could constitute bad faith, notwithstanding the fact that the insurance company offered its policy limits to the injured claimants in exchange for a full release of liability. The insurance company had refused to consent to additional language in the release designed to preserve the claimant's rights to receive criminal restitution from the insured tortfeasor.