We have a personal injury claim against at fault defendant insurance company. Liability is not an issue but damages are not accepted by their insurance company. Policy limits are 100k/300k and We found that insurance company can be in bad faith if they don't settle for 100k and there is an access verdict. Now we asked for 125k and insurance company did not accept it and offered us less than 10k .... this itself can lead to bad faith or they can offer their policy limits before trial and avoid bad faith claim?
In short if they offer policy limits any time before trial date (even a day before trial?) can they avoid bad faith or there is a certain time limit before trial for example discovery cut off date or before deadline to adjust trial date, they have to offer policy limits?
Your first step will be to contact a personal injury attorney, preferably someone local. I have not done personal injury work in Washington, but my recollection from law school is that an offer in excess of the policy limit does not "activate" the insurance company's duty, and the insurer is not responsible for a judgment above the policy limit.
That being said, the difference between the amount you asked for and the amount offered leads me to suspect that you might not be valuing the claim properly, they are ignoring some aspect of the claim (like pain/suffering or emotional distress) or they may not agree on the percentage of fault.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
This is a complicated area of law. If you don't have an attorney, you need one. I think you misunderstand Bad Faith law as it applies to your situation. The bad faith claim would arise if plaintiff offered to settle within policy limits, that offer was rejected, and the court later found damages exceeded the policy limits. The insurance company might then be found to have been in bad faith AS TO ITS OWN INSURED because it caused that person to have a judgment entered against him/her or otherwise put the defendant's persona assets at risk by rejecting the settlement offer. You, as plaintiff, have no Bad Faith claim because the other party's insurer owes no duty to you.
IFCA does not apply. It is for first party claims against your own insurance. Bad faith also does not apply to a third party claim. As Mr. Carlson has pointed out, the defendant may have a claim for bad faith against his own insurer if they had an opportunity to settle for the policy limits but failed to pay and later gets hit with a verdict far in excess of the policy limits. You should consult with a local personal injury attorney to discuss further and probably will need one to file a lawsuit based on the initial offer of $10,000 (assuming your case is really worth anywhere near $125,000).
If the defendant's insurance company has a chance to settle within the policy limits, defending, and if the plaintiff gets a judgment in excess of the policy limits, it is the defendant, not the plaintiff, who has a claim against the insurance company. The fact that the defendant can make a claim does not necessarily mean they will win; the insurer may have decent arguments that it acted in good faith.
Sometimes the defendant cuts a deal with the plaintiff whereby the plaintiff agrees not to execute on the excess judgment if the defendant assigns his claim against the insurer to the plaintiff. But doing this correctly can be tricky.
I always include an expiration date on settlement offers. Once that date passes, the offer is gone. This obviously does not prevent either party from making brand new offers in any amount.
If you have an attorney, you should discuss these issues with him or her. If you don't have an attorney, your chances of getting an excess verdict aren't much better than your chances of winning Lotto next week.
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