Washington Case Law Update: Court Finds Issues of Material Fact on Reasonableness of Insurer’s Handling of UIM Claim

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Washington Case Law Update: Court Finds Issues of Material Fact on Reasonableness of Insurer’s Handling of UIM Claim

From the Desk of Joshua P. Hayward: Numerous statutes in Washington require insurers to act in good faith when dealing with the insured’s UIM and PIP claims. Among other requirements, acting in good faith requires an insurer to act “reasonably.” In the event that the insurer’s expert determines that the insured’s medical condition was not caused by the accident but the insured’s expert determined that it was, does the insurer act in bad faith by relying solely on the opinion of its own expert?

Claims Pointer: In this case arising out of a car accident, the insured sought UIM benefits claiming that the car accident caused her dermatomyositis condition. The insured’s medical expert determined that the dermatomyositis condition was caused by the car accident, while the insurer’s medical expert determine that it was “more likely than not” that the car accident did not cause the insured’s condition. The Washington Court of Appeals determined that there was an issue of material fact as to whether it was reasonable for the insurer to rely solely on the opinion of its own medical expert when there was other credible evidence related to causation.

Leahy v. State Farm, 76272-9-I, Washington Court of Appeals Div. I (May 21, 2018).

Shannon Leahy (“Leahy”) suffered soft tissue injuries in a car accident. Leahy first sought PIP benefits and later sought UIM benefits from her insurer, State Farm Mutual Automobile Insurance Company (“State Farm”). After the accident, Leahy was also diagnosed with dermatomyositis (“DM”). Leahy alleged that the condition was triggered or caused by the accident. State Farm’s adjuster requested Leahy’s medical treatment records for three years prior to the accident, none of which mentioned Leahy’s dermatomyositis condition. Leahy provided State Farm with a report from her rheumatologist,...

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