Jury Finds Against State Farm for $6.3 Million

10/07/2021 | Unfair Insurance Practices/Bad Faith

A federal jury in Los Angeles rendered a verdict of $6.3 million against insurer State Farm, after the insurance company failed to pay for damage to actress Shannen Doherty’s home.  Doherty’s home was damaged in the 2018 wildfire.  She made a claim to State Farm for damages, but the insurer apparently did not pay policy benefits.  The jury found the insurance company’s failure to pay policy benefits “unreasonable and without proper cause.” 

At least one item in dispute was State Farm’s refusal to extend coverage of monthly payments for a rental home while her permanent home was filled with “toxins” from the fire.  However, after she was forced out of the rental, State Farm conducted new testing on her property and found the damage was much more extensive than originally determined.  Then, State Farm agreed to provide three more months of rent, but after Ms. Doherty had already left her rental property.  After the lawsuit was filed, State Farm covered the rental costs through 2019. 

The dispute at trial was whether or not State Farm had paid out appropriately under Doherty’s homeowner’s insurance policy for the damage to her home.  Ultimately, the jury found State Farm breached its contract with Doherty by failing to pay benefits under three sections of the insurance policy.  Next, the jury found State Farm did not deal in good faith and fairly, with their failure to pay benefits under the policy “unreasonable and without proper cause.”  And, finally, the jury found State Farm’s actions were a substantial factor in causing harm to Ms. Doherty, awarding her $6.3 million in total damages. 

When insurance companies refuse to pay benefits under an insurance contract, they may be acting in bad faith.  Kentucky has a law called the Unfair Claims Settlement Practices Act that prohibits insurance companies from acting in certain ways, including refusing to pay a claim within a reasonable time after the loss where liability is reasonably clear.  The Poppe Law Firm is experienced in handling bad faith claims throughout Kentucky, with verdicts and settlements totaling over $9,000,000, including the then largest bad faith verdict in Kentucky, $3,829,277.  If your insurance company won’t pay your claim, call The Poppe Law Firm at 502-895-3400 or visit www.PoppeLawFirm.com.