Attention March 13th, 2024 Webinar Attendees, please click here to complete our Survey or Attendance Verification and Credit Request Form. (required for CLE credit)

Indiana Court Issues Key Ruling on Insurer Good Faith

Last update

at

by:

by:

Share

Print Friendly, PDF & Email
The plaintiff was injured in an auto accident.

By Alex Beeman, Reminger Attorneys

Indiana has long recognized an insurer owes a duty to deal in good faith with its insured policyholder. The Indiana Court of Appeals recently held for the first time that an insurer also owes a duty of good faith and fair dealing to an insured who is not a policyholder.

In Monika Schmidt v. Allstate Property and Casualty, 2020 Ind. App. LEXIS 44, 2020 WL 701176 (Ind. Ct. App. 2020), the Plaintiff was injured while a passenger in a car driven by a friend. That friend was an insured of Allstate. Plaintiff sued the underinsured driver of the other vehicle for negligence, her friend, and Allstate. Pursuant to the Allstate policy, Plaintiff qualified as an insured under that policy: “any person while in, on, getting into or out of, or going on or off of an insured auto with your permission.”

When you have professional liability insurance coverage through Alta Pro Insurance, you get the claims repair and legal defense expertise of Reminger Attorneys on your side. Want to have a resource like that in your practice? Here’s how to get it.

Plaintiff had demanded the underinsured motorist coverage limits from Allstate which they refused.  laintiff argued that Allstate owed her a duty of good faith and fair dealing as its insured and that it breached that duty with respect to the underinsured claim (i.e. bad faith). The trial court dismissed her claims as she was not a policyholder with the insurer. On appeal, however, the Indiana Court of Appeals reversed, finding in favor of Plaintiff.

The Indiana Court of Appeals unequivocally found that “an insurer owes a duty of good faith and fair dealing to an insured who is not the policyholder.” (emphasis added). The Court could “think of no principled reason for not requiring insurers to deal in good faith with all insureds.” (emphasis added).

Despite this being the first case to squarely address this issue, none of the parties requested the case be reheard or reviewed. Accordingly, the Schmidt decision is now the law of the land.  In practice, this requires insurers and claim handlers to ensure that all persons who are “insureds”—whether the insured is a policyholder or not—be dealt with in good faith.

If you would like a full copy of the opinion or if you have any other questions related to claims handling, including allegations of bad faith, feel free to call upon one of our Insurance Coverage and Bad Faith Practice Group Attorneys.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.

Reminger’s risk prevention hotline is just one of the many benefits of being insured with Alta Pro. Have you logged onto the Alta Pro Lawyers RPG website, so you can start taking advantage of our practice resources? If not, get started here!

About the Author

Alex Beeman practices in Reminger Co., LPA’s Indianapolis office, where he focuses on defense litigation matters involving general liability, worker’s compensation, governmental/public entity liability, insurance/bad faith liability, premises liability, trucking and transportation, and probate.

Share

Print Friendly, PDF & Email

Related Posts on Altaprorpg.com!

Alta Pro Logo Icon

About the Editorial Staff

In an age of consolidation where increasingly impersonal transactions have made customer service an oxymoron, we bring together independent agents, insurance companies, and other industry specific service providers to develop and deliver insurance products and risk management solutions that benefit our insurance customers.

June 12, 2024 1:00 pm EST
1.0 Ethics Credit
September 18, 2024 1:00 pm EST
1.0 Regular Credit
December 11, 2024 1:00 pm EST
1.0 Ethics Credit

Join Our Newsletter

Occasional newsletters and CLE invites

Find Us on Social

Upcoming CLE Webinar: Cybersecurity Ethics : Start with the Basics

June 12, 2024 1:00 pm EST
CLE Credit: 1.0 Ethics

David G. Ries

Clark Hill

Archives

Need Help?

Visit our Frequently Asked Questions page. 

Or email us directly at info@altaprorpg.com

Or submit your issue in the comment form below and we will respond as soon as possible.