Legal Resources for Insurance Bad Faith Cases

Insurance companies love to make money. But, many insurers figure out any way possible to deny, delay and defend claims when a claim is made. These corporations are so clever in what they do, that they can underpay different parts of a claim without anyone noticing. Most people who realize the insurer is underpaying will not bother to do anything about it because it might be just a few hundred or thousands of dollars. But, when the same thing happens to millions of people, the insurer is knowingly underpaying claims by millions or even billions of dollars every year.

Some insurers have made institutional choices to underpay claims. Maybe it is like the case scenario above – just a little at a time.  In other cases, the insurers have become so bold due to a lack of effective regulation that they simply refuse to pay legitimate claims, or make “low ball” offers that don’t appropriately consider the value of an insurance claim.  People who experience a loss caused by the insured (third party claims) and even policyholders of the insurance themselves (first party claims), are forced by insurers to litigate in order to receive adequate compensation for their insurance claims.  Through advertising and media campaigns, the insurer relies upon jurors who will assume that a reasonable settlement offer has already been made, when in fact little or no offer may have been made.

An “implied covenant of good faith and fair dealing” exists by operation of law in every insurance contract between the insurance company and its policyholder.  But, that requirement of good faith and fair dealing is often ignored or abused by insurers. The violation of good faith provides a party a tort cause of action in most states for an “insurance claim practice case,” or what are often referred to as “insurance bad faith” claims. 

In the “first party” context between the policyholder and the insurer, “bad faith” can arise in auto insurance uninsured motorist or underinsured motorist claims, homeowner insurance bad faith, disability insurance bad faith, business interruption bad faith, commercial and business insurance bad faith claim denials, health insurance bad faith claim denials, and even life insurance bad faith claim denials.  A common type of first party bad faith occurs when insurers refuse to pay claims after a natural disaster destroys a policyholder’s home or business. In some natural disaster cases insurers have shredded documents showing evidence of wind damage (that they would be required to pay) and instead hiring a different “expert” to say that the damage was caused by a water “surge” which they do not cover – thereby improperly denying insurance coverage. In the third party context, bad faith insurance claims arise when the insurer, after undertaking a fiduciary duty to protect their insured, fails to offer the full value of a claim to the injured party, thereby subjecting their insurance policyholder to an “excess verdict” above their insurance policy limit.  This can happen in a variety of cases including business litigation, intellectual property, medical malpractice, motor vehicle cases, premises liability cases, negligent property damage claims, and many other areas of litigation.

There are powerful incentives for insurance companies to cheat. By intentionally denying or underpaying claims, insurers can decrease insurance premiums, which allows them to capturing more market share for people looking for the least expensive insurance rate. The result is that not only do these companies improperly profit on claims, but they also capture more money by obtaining more customers through decreased premiums.  This in turn makes shareholders of the insurer more money, resulting in executive pay sometimes exceeding $100 Million.  This is why insurance company executives often consult with the world’s leading business consulting companies on claim payment methods to reduce payouts – the same business consulting companies that hleped some of the world’s largest banks, insurers and corporations create the conditions leading to the 2008 financial meltdown.  Consumers don’t realize they have been sold poor quality insurance coverage (prioritizing executive pay) until it is too late – when they make a claim.

Most of the time, the only way an individual policyholder can stop fraudulent insurance schemes to underpay claims or insurance bad faith, is to hire an insurance bad faith lawyer and go to trial. This allows jurors from the community to decide if the biggest, richest and most powerful insurance companies in the world will be held accountable to pay claims properly.  The value of insurance as a true protection for citizens, relies upon jurors to stop harmful conduct by the insurers.  Without that, every insurance company has to cheat to compete with insurers who can reduce insurance premiums by underpaying claims.

For you to be able to competently handle insurance bad faith cases and insurance fraud cases, you need to understand the insurance industry, and the most effective ways for handling bad faith claims.  As it happens, Trial Guides started with a series of products aimed at lawyers handling insurance bad faith claims, starting with our very first product.

Here is a list of the top products we suggest if you want to succeed in handling insurance bad faith cases:

Top 10 Insurance Bad Faith Resources for Lawyers

The list below focuses on specific skills, knowledge and methods that will help you win insurance bad faith cases. To see all products sold by Trial Guides that relate to handling insurance bad faith cases, please click the button at the bottom of the page.

Recommended Resources

Rules of the Road

Rules of the Road

A Plaintiff Lawyer’s Guide to Proving Liability

Rules of the Road™ is America’s bestselling text on proving liability. At the time Rules of the Road was written, Rick Friedman was best known for winning large verdicts in difficult insurance bad faith claims. He continues to be considered one of the best bad faith lawyers in America today. Rules of the Road directly addresses insurance bad faith cases, helping you take a case filled with complexity, confusion, and no set standards for claim handling, and instead create “rules” from a variety of industry sources or insurance company manuals which the defendant and defense experts cannot credibly disagree should have been followed in handling an insurance claim. This helps demonstrate to the jury that the insurer chose to break known and accepted rules of the insurance industry in your case. Called a “masterpiece,” by leading plaintiff lawyers, Rules of the Road has helped tens of thousands of lawyers obtain six, seven and eight figure verdicts in difficult factual cases.

Also available as an audio book.

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From "Good Hands" to Boxing Gloves

From "Good Hands" to Boxing Gloves

How Allstate Changed Casualty Insurance in America

This is the book that Allstate and the insurance industry never wanted published. In 1992 Allstate started a pilot project with the world’s leading business consultant McKinsey & Co., that has changed the way insurance companies in America treat their customers, leading to record profits for the company. The goal was to increase shareholder price and executive pay by decreasing claims payments to injured people. The plan worked, slashing claim payments by billions of dollars, and resulting in massive executive pay. Since that time, the rest of the insurance industry has scrambled to incorporate these techniques. Author David Berardinelli is the bad faith lawyer who diligently worked to become the first to obtain McKinsey’s claim consulting notes and the formative notes for Allstate’s CCPR claim process system (often referred to as “The McKinsey Documents”) unprotected, and discusses them here at length. Michael Freeman, co-author of Litigating Minor Impact Soft Tissue Cases, and the nation's leading trauma epidemiologist, discusses Allstate's minor impact or “MIST” program. The book provides instruction for every level of bad faith lawyer, from those just starting to deal with insurers on a case-by-case basis, to those with the most difficult bad faith and insurance class action cases.

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30(b)(6)

30(b)(6)

Deposing Corporations, Organizations & the Government

In every insurance bad faith case, your defendant will be an insurance corporation, or organization such as an exchange. You are taking on a massive entity with far more money and lawyers than your office. This book teaches you the incredible power available in these cases using FRCP 30(b)(6) and the associated state laws governing corporate and organization depositions. The book takes you step by step through how to designate the areas of inquiry for the designee deposition and forcing the defendant to appoint one or more people to answer on behalf of the organization with all information known to that corporation, organization or entity. It also teaches you how to notice an affiliated non-party for depositions in your insurance claims. Using the knowledge from this book, you will no longer let corporate deponents get away with answers like “I don’t know,” because the organization is required to give that designee all knowledge pertaining to the topics you list in your notice. Gone are the days of “the person most knowledgeable,” and evasive answers, because a denial of knowledge by the deponent is a denial of knowledge by the corporation or entity itself. The book goes beyond just the oral deposition, and includes tips on document depositions when defense counsel has refused to provide discovery through requests for production or interrogatories. The book is also filled with state and federal case law on 30(b)(6) depositions that can be used in your motions to compel, and motions for sanctions when the opposing party engages in discovery abuses. This book is critical for every lawyer handling any type of case against a corporation, organization or governmental entity, and has transformed thousands of lawyers’ discovery practices.

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Insurance Coverage Litigation, Second Edition

This two volume treatise by insurance claim guru Eugene R. Anderson is now revised in an updated edition, but still contains many of his groundbreaking ideas on insurance coverage claims and litigation.  Anderson created insurance law as we know it, and is an icon in the field.  Anderson went from being an orphan in Oregon to Harvard Law School (the result of hitch hiking with a lawyer who was so impressed that he put in a good word with the admissions board), to starting the leading insurance coverage law firm in the United States -  Anderson Kill in New York City.  Anderson helped establish the principle in federal appellate court of the "triple trigger", which would allow a company to be covered for claims against it, at any of the points where a claimant against the company was either exposed, turned ill or filed a claim.  This provided insurance coverage in some cases, many years after the policy had ended for claims where a person was exposed and later became ill.During his career Gene handle some of the largest insurance cases in the world. Some say that Anderson career fighting insurers was the inspiration for John Grisham’s The Rainmaker.  In addition to handling insurance cases ranging from toxic torts to 9/11 claims, Anderson undertook a decade long fight on behalf of the families of Holocaust victims against European insurance companies that had never paid on their life insurance policies.  Gene mentored many of the country’s leading insurance coverage and insurance bad faith lawyers.  He took a keen interest in Trial Guides just as the company got started, was in regular contact with founder Aaron DeShaw brainstorming insurance cases until his death on July 30, 2010.  During that time, he wrote the introduction to From Good Hands to Boxing Gloves.

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The Claims Environment, 1st Edition

published by the Insurance Institute of America (now called The Institutes – Risk & Insurance Knowledge Group).

This book, long used as the training manual for adjustors and the CPCU certification by the Insurance Institute of America, provides lots of gems that are admitted by the insurance industry as standards of care in adjusting claims.  The book is filled with “Rules of the Road” for claim practice cases.  Make sure that you get the first edition of this book as the insurance industry realized the mistake in admitting things like the fact that insurers are “expected to pay claims promptly and in full.”

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Colossus: What Every Trial Lawyer Needs to Know

by Aaron DeShaw

Long out of print, this was Trial Guides’ first product, released in 2004.  Based on three years of investigation into bodily injury claims software, this treatise is aimed at lawyers handling auto claims and bad faith cases arising from auto claims.  It discusses a wide variety of problems with bodily injury claims software systems – most notably the widely used Colossus program.  The book discusses everything from the intentional underpayment of claims caused by an insurer’s benchmark tuning of the software, to problems within the software that would create underpayment, to significant problems with adjustor data accuracy resulting in improperly low settlement offers. Very difficult to find on the used market because the lawyers who own them don’t sell them.  The next best thing is Trial Guides’ Demand Letters video, but that doesn’t focus nearly as much on problems with the software programs that result in intentional underpayment of claims.

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David Ball on Damages 3

David Ball on Damages 3

Widely considered “the bible” of handling plaintiff personal injury litigation cases, it also helps you consider issues pertaining to bad faith trials. Damages 3 provides specific instructions on how to handle every part of your trial, from voir dire to closing. Sample opening and closings are provided, as well as the rationale why you sequence things in a particular way. The 3rd (white) edition of this book, contains substantially more information than the prior (red) edition, and is the only place where the concepts of the Rules of the Road™ method is integrated with the Reptile™ method of trying cases.

Also available as an audio book.

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Winning with Stories

Winning with Stories

Using the Narrative to Persuade in Trials, Speeches and Lectures

Storytelling continues to be an important part of advocacy, and the best resource for storytelling in the courtroom is Jim Perdue’s Winning with Stories.

Beginning with an exploration of the story concept, Perdue analyzes narrative elements in detail, showing how to craft a story with a strong beginning, memorable scenes, believable characters, a logical plot, vivid action, and a moving conclusion. Going beyond these basics, Perdue demonstrates how to tell the story to maximum effect. Perdue covers mannerisms, physical movement, use of illustrative visuals, and other storytelling considerations in detail. This helps you create the narrative for your opening and throughout trial.

Winning with Stories is also an invaluable anthology of stories that speakers can use to make and illustrate a point. Perdue includes abundant examples of useful metaphors, similes, clichés, analogies, quotations, personal anecdotes, and humorous stories. He uses illustrative examples of actual opening statements and closing arguments the author has used to inspire juries to a winning verdict.

(A good companion for this book is Twelve Heroes by Carl Bettinger).

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Stop Your Whining and Go To Trial

Stop Your Whining and Go To Trial

In this video Rick Friedman covers specific tactics for trial, including the importance of lay witnesses, direct examination methods, as well as techniques for framing your case in voir dire and opening.

Rick also discusses the lawyers who have most greatly influenced his career and how their lessons can help you achieve excellence. In his top 5, he notes, "Over the last ten years, no lawyer has taught me more about trying cases than Don Bauermeister."

This is the only Trial Guides product featuring Don Bauermeister, one of the leading minds in the plaintiff bar, often asked for strategy advice in complex litigation cases. In this video, Don discusses how developments in cognitive neuroscience allow us to understand how jurors make decisions and how to persuade even the most conservative jurors. Rick and Don also address how to deal with the issue of large punitive damages you seek against insurers to stop their bad conduct.

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Reptile

The 2009 Manual of the Plaintiff’s Revolution

Leadingtrial consultant David Ball, and nationally renowned trial lawyer Don Keenan have written an important book on trial advocacy that is equally loved by plaintiff lawyers and fought by defense counsel.  The Reptile method builds upon Moe Levine’s “jury as conscience of the community” arguments, by “spreading the tentacles of danger” from the defendant insurance company’s conduct into the lives of the jury and those they love. This makes clear that the bad faith of the defendant that hurt plaintiff also poses danger to their friends, family and themselves.  Based upon the book <em>The Triune Brain</em> written by neuroscientist Paul MacLean, and internationally renowned marketing researcher Clotaire Rapaille, Keenan and Ball suggest that the oldest part of the brain (the Reptilian Brain) in the jurors will make clear that the only “safe” verdict is to decide against the party that endangers the public.  One of the biggest benefits of the Reptile method is that many jurors who might otherwise be biased against your client, will punish rule breakers, creating massive verdicts for the plaintiff in venues where the defendant will least expect them. Best read after Rules of the Road and before David Ball on Damages 3.  We suggest this order because David Ball on Damages 3 integrates what you learned in Rules of the Road and Reptile, then combines those methods with David Ball’s own effective methods for maximizing damages.

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Delay Deny Defend

Why Insurance Companies Don't Pay Claims and What You Can Do About It

*For your clients*


Early after the launch of the first few Trial Guides products on insurance bad faith, Professor Jay Feinman started researching the topic for his book Delay Deny Defend.  Approaching the subject objectively, Feinman realized during his research the level of abuse happening in insurance claims by the insurance industry, resulting in a book best described as an expose on the insurance industry.  The book discusses that the denials of valid insurance claims is not occasional or accidental, but instead caused by a systematic focus on maximizing improper profits to increase shareholder and executive pay.  Despite the book being aimed at the public, it covers important points of consideration that may be helpful in framing a case for a jury.

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