It isn’t often that you run across a story about insurance that is even close to being tabloid fodder. We feel it incumbent on us to seize on those rare occasions, then, even if the cases are not from Florida. The insurance carrier in the story, State Farm (technically, State Farm Mutual Automobile Insurance Company), certainly does business in Florida, but the people involved do not live here, and the events leading up to the claim did not happen here.
The policyholder, Sandra Will Carradine, is suing State Farm for breach of contract and breach of faith. She is asking for $412,240 in damages to cover the costs she incurred when the insurance company failed to respond to her claim. The complaint goes to the heart of the insurer’s obligations under the policy: Every insurance company has a duty to defend a policyholder in a third-party lawsuit.
The lawsuit in question here was filed by Sandra’s ex-husband, actor Keith Carradine, in 2006. He accused her of hiring a private detective who proceeded to spy on Keith and to tap his phones. In the complaint for that lawsuit, Keith says Sandra admitted to hiring Anthony Pellicano, the famed Hollywood detective who is currently serving a 15-year prison sentence for, among other things, wiretapping, to tap the actor’s phone.
Liability coverage is similar to property coverage in a number of ways, but there are some important differences. First and foremost, a property insurance claim is generally just between you and your insurance company, while a liability claim involves a third person, the person who says you are responsible for the injury or harm he suffered.
It could be a neighbor who has fallen over a lawn chair at your Fourth of July barbecue. He sues you for negligence. Your insurance policy covers third-party claims, so your insurance company has a duty to provide you with an attorney or to pay for an attorney’s services.
If the insurance company does not do so, the insurance company is in breach.
We’ll continue this in our next post.
Source: Courthouse News Service, “Insurer Sued for $400K in Pellicano Case,” April 1, 2013
We work with policyholders who are involved in coverage disputes with their insurance companies. Please visit our website for more information about our Miami, Florida, practice.Share