Portland First Party Bad Faith (Moody) Claims Lawyer
Oregon law forbids insurance companies from engaging in certain “unfair claim settlement practices.” See ORS 746.230. Essentially, an insurer cannot deliberately delay or refuse to pay an insurance claim without a reasonably valid reason. Even making a policyholder wait an excessive amount of time to receive coverage is considered an unfair practice, even if the claim is ultimately paid.
Policyholders have long been able to sue an insurance company for breach of contract for unreasonably denying a claim, but for years Oregon consumers could not sue their insurance company for the manner with which their insurer handled their claim. This has now changed and Oregonians are now able to hold their insurers accountable when the insurer negligently process and adjusts an insurance claim. A qualified Portland first party bad faith claims lawyer can review your specific case and advise you on the current state of the law in this area. Rosenbaum Law Group, PC, is a dedicated team of Oregon personal injury lawyers who know how to deal with insurance companies that refuse to deal with their policyholders in good faith.
Oregon Court of Appeals Opens the Door for “Emotional Distress” Claims
In January 2022, the Oregon Court of Appeals issued a landmark decision, Moody v. Oregon Community Credit Union, 317 Or App 233 (2022) which recognized potential first-party insurance claims against insurers who act in bad faith. Moody involved a woman who filed a claim on a $3,000 life insurance policy after her husband died in a tragic accident. The insurance company denied the claim, citing an exclusion for deaths resulting from the use of intoxicants. Although the victim had marijuana in his system when he died, that was not the cause of his death—a friend of his accidentally shot him during a camping trip.
After the life insurance company wrongfully denied the claim, the widow sued the insurance company, alleging its denial of her claim violated Oregon’s unfair claim settlement practices act. She further sought damages for emotional distress based on the insurer’s negligence in violating the law.
Historically, Oregon courts had been reluctant to recognize negligence claims arising from insurance bad faith. Many other states do recognize such claims. Thanks to the Moody decision, Oregon now does as well. The Court of Appeals concluded that in adopting the unfair claims practices law, the Oregon legislature likely sought “to prevent policyholders from being forced to experience the stress of dealing with unfair insurance claim settlement practices.” On that basis, the plaintiff could proceed with her negligence claim for emotional distress.
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Even with the Moody decision, proving an insurance company’s bad faith is not easy. The policyholder has the burden of proving the insurer broke the law and that they suffered a legal injury as a result. The mere denial or delay of a claim is not in and of itself proof of bad faith.
Still, if you have been repeatedly frustrated in your own dealings with an insurance company, it is in your best interest to speak with a Portland first party bad faith claims lawyer. The team at Rosenbaum Law Group, PC, can review the facts of your case and advise you of your potential options. Contact us today to schedule an initial consultation.