Insurance Company Hit With Huge Punitive Judgment

The Jacksons had a deluxe homeowner’s insurance policy.  They had been promised by the agent who sold them the policy that everything in the home was covered, including major appliances.

When a short circuit destroyed their air-conditioning unit in the middle of the summer, the Jackson’s filed an insurance claim.  The agent turned the claim over to the company and the trouble began.

The insurance claims adjuster blamed the short-circuit on “wear and tear,” which resulted in a total insurance denial.  The expensive replacement policy, according to the company’s definition, could not be expected to replace older appliances.

When the Jackson’s pointed out that the agent had promised complete coverage, the insurance claims adjuster ignored them and stood by his claim denial.

After calling me, the Jackson’s situation changed dramatically. I saw to it that a qualified air conditioning expert was retained to inspect the air conditioning unit.  It was determined that a five dollar part short-circuited, destroying the air-conditioning unit. Still, the company ignored the evidence and denied the claim. I filed a lawsuit for insurance bad faith against the insurance company.

As a result of our lawsuit, the Jacksons recovered over $400,000 for their $5,000 unit.

Why did the Jackson’s recover so much when their claim was only for $5,000?

The jury found that the insurance company had engaged in insurance bad faith, which entitled the Jacksons to recover punitive damages.  Punitive damages are a type of damages that can be awarded solely to punish a defendant for wrongful conduct.  In essence, a jury is telling a defendant “Your conduct was reprehensible and deserves to be punished.”

Tip – Often, insurance companies will push the limit in how they treat their clients.

They know that most clients will eventually take a low payment, usually because the people desperately need the money, are tired of fighting with the insurance company, or they don’t know where else to turn.  Insurance companies know that if the vast majority of people agree to these low settlements, they can still pay out the fair amount of money (or more) to the few people who won’t accept their unreasonably low settlements, and still come out ahead.

When an experienced Arizona insurance bad faith lawyer is retained, insurance companies immediately know that they are dealing with someone who is knowledgeable about the rights and duties of insurance companies to pay legitimate claims, and who will seek to hold them accountable if they do not do so, perhaps even for punitive damages.  We hope that this knowledge will be enough for insurance companies to do the right thing and pay what they legitimately owe.

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Tucson, Arizona 85712

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