Your insured is injured in an auto accident and makes a claim pursuant to his/her UM/UIM coverage. You can't agree on the reasonable settlement amount, so your insured invokes the arbitration clause set forth in the auto policy. An award of damages is eventually entered by the arbitration panel, and you promptly pay that award in full.
Having completely satisfied the terms and conditions of the auto policy, your company can now close the claim and move on to the next one, right?
Not necessarily, a federal court recently concluded. In Guessford v. Penn National (M.D.N.C. Jan. 16, 2013), Judge Beaty held that an insured who had been paid promptly and in full by his UIM carrier following the entry of an arbitration award could still assert claims for bad faith and unfair and deceptive trade practices based on Penn National's handling of the UIM claim.
In the current issue of the North Carolina Insurance Law Newsletter, I provide a summary of the Guessford decision, followed by some lessons that North Carolina auto insurers can take away from that case. Click here to read the newsletter http://ow.ly/kBnfP and, if you are so inclined, I encourage you to sign up to receive my quarterly newsletter via email. You'll find the sign-up box in the right-hand column of my blog. ==>