May, 2002

 

Chart Presents State-by-State Policy With Case Citations

 

Jurisdiction

Recognized

Citation

Alabama

Yes

Chavers v. National Security Fire & Casualty Co., 405 So. 2d 1 (Ala., 1981)

Alaska

Yes

State Farm Fire & Casualty Insurance Co. v. Nicholson, 777 P.2d 1152 (Alaska, 1989)

Arizona

Yes

Noble v. National American Life Ins., 624 P.2d 866 (Ariz., 1981)

Arkansas

Yes

Aetna Casualty & Surety v. Broadway Arms Corp., 664 S.W.2d 463 (Ark.,1984)

California

Yes

Gruenberg v. Aetna Insurance Co., 510 P.2d 1032 (Cal. 1973)

Colorado

Yes

Farmers Group Inc. v. Trimble, 658 P.2d 1370 (Colo.App.,1982)

Connecticut

Yes

Grand Sheet Metal Product Co. v. Protection Mutual Ins., 375 A.2d 428 (Conn.Super. 1977)

Delaware

Recognizes right to recover extra-contractual damages.

Tackett v. State Farm Fire & Casualty Insurance Co., 653 A.2d 254 (1995)

District of Columbia

No

State Farm Mutual Auto Insurance Co. v. Hoang, 682 A.2d 202 (1996)

Florida

Yes

Escambia Treating Co. v. State Farm Mutual Insurance Co., 421 F.Supp. 1367 (1976)

Georgia

No

Tate v. Aetna Casualty & Surety Insurance Co., 253 S.E.2d 775 (1979)

Hawaii

Yes

The Best Place, Inc. v. Penn. America, 920 P.2d 334 (1996)

Idaho

Yes

White v. Uniguard Mutual Insurance Co., 730 P.2d 1014 (1986)

Illinois

Yes

Eckenrode v. Life of America Insurance, 470 F.2d 1 (1972)

Indiana

Yes

Erie Insurance Co. v. Hickman, 622 N.E.2d 515 (1993)

Iowa

Yes

Dolan v. Aid Insurance Co., 431 N.W.2d 790 (1988)

Kansas

No

Spencer v. Aetna Life & Casualty Insurance Co., 611 P.2d 149 (1980)

Kentucky

Yes

Curry v. Firemans Fund Ins. Co., 784 S.W.2d 176 (1989)

Louisiana

Yes

La. R.S. §22:1220

Maine

No

Marquis v. Farm Family Mutual, 628 A.2d 644 (1993)

Maryland

No

Caruso v. Republic Insurance Co., 558 F.Supp. 430 (1983)

Massachusetts

Yes

Mass. Ann. Laws ch. 93A, §9 and ch. 176D, §3(g)

Michigan

No

Kewin v. Massachusetts Mutual Life, 295 N.W.2d 50 (1980)

Minnesota

No

Wilson v. Colonial Penn. Life Ins. Co., 454 F.Supp. 1208 (1978)

Mississippi

Yes

State Farm Fire & Casualty v. Simpson, 477 So. 2d 242 (1985)

Missouri

No

Duncan v. Andrew County Mutual Ins. Co., 665 S.W.2d 13 (1983)

Montana

Yes

MCA Section 33-18-242

Nebraska

Yes

Braesch v. Union Ins. Co., 464 N.W.2d 769 (1991)

Nevada

Yes

United States Fidelity v. Peterson, 540 P.2d 1070 (1975)

New Hampshire

Recognizes right to recover extra contractual damages

Lawton v. Great S.W. Fire Ins. Co., 392 A.2d 576 (1978)

New Jersey

No

Pickett v. Lloyd's and Peerless, 621 A.2d 445 (1992)

New Mexico

Yes

State Farm General Ins. Co. v. Clifton, 527 P.2d 798 (1974)

New York

No

Forty Exchange Co. v. Cohen, 479 N.Y.S.2d 628 (1984)

North Carolina

Yes

Lovell v. Nationwide Mutual Ins. Co., 424 S.E.2d 181 (1993)

North Dakota

Yes

Corwin Chrysler-Plymouth v. Westchester Fire, 279 N.W.2d 638 (1979)

Ohio

Yes

Kirk v. Safeco Ins. Co., 273 N.E.2d 919 (1970)

Oklahoma

Yes

Christian v. American Home Assur., 577 P.2d 899 (1978)

Oregon

No

Porter v. Utah Home Fire Ins. Co., 650 P.2d 130 (1982)

Pennsylvania

Yes

Diamon v. Penn Mutual Fire Ins. Co., 372 A.2d 1218 (1977)

Rhode Island

Yes

Bibeault v. Hanover Ins. Co., 417 A.2d 313 (1980)

South Carolina

Yes

Robertsen v. State Farm Mutual Auto Ins. Co., 464 F.Supp. 876 (1979)

South Dakota

Yes

In Re Certification of Question of Law, 399 N.W.2d 320 (1987)

Tennessee

No

Myint v. Allstate Ins. Co. 970 S.W.2d 920 (1998)

Texas

Yes

Arnold v. National County Mutual Fire Ins. Co., 725 S.W.2d 165 (1987)

Utah

Recognizes right to recover extra contractual damages

Beck v. Farmers Insurance Exchange, 701 P.2d 795 (1985)

Vermont

Yes

Phillips V. Aetna Life Ins., 473 F.Supp. 984 (1979)

Virginia

No

Meccia v. Pioneer Life Ins., 13 Va. Cir. 17 (1987)

Washington

Yes

Kirk v. Mt. Airy Ins. Co., 951 P.2d 1124 (1998)

West Virginia

Recognizes right to recover extra contractual damages

Hayseed Inc. v. State Farm Fire & Cas. Ins. Co., 352 S.E.2d 73 (1986)

Wisconsin

Yes

Anderson v. Continental Ins. Co., 271 N.W.2d 368 (1978)

Wyoming

Yes

McCullough v. Golden Rule Ins., 789 P.2d 855 (1990)

 

 

 

Reverse Bad Faith Information

 While insureds and third parties may bring bad faith actions against insurers, insurers in most jurisdictions do not have the same opportunity. Some insurers have sought to establish a tort of reverse bad faith, or the tortious breach of the covenant of good faith and fair dealing by the insured.

 Although the Oklahoma Supreme Court refused to recognize a tort of reverse bad faith, it described the doctrine as an “independent tort allowing insurers to seek affirmative relief for an insured's breach of the duty of good faith and fair dealing. The approach draws from the principle that an insurer should not be subjected to bad-faith liability if the insured (a) procured the policy through fraud, (b) breached contractual obligations, or (c) engaged in other misconduct.” First Bank of Turley v. Fidelity and Deposit Ins. Co. of Maryland, 928 P.2d 298 (Okla. 1996).

 Most jurisdictions are silent on the subject, but some have specifically declined to recognize the tort of reverse bad faith. See Johnson v. Farm Bureau Mutual Ins. Co., 533 N.W.2d 203 (Iowa 1995); Tokles & Sons, Inc. v. Midwestern Indem. Co., 605 N.E.2d 936 (Ohio 1992); and Lewis v. Aetna Ins. Co., 78 F. Supp.2d 1202 (N.D. Okla. 1999).

 A Tennessee statute, though, imposes a liability on insureds when actions are not brought in good faith. If a suit is not brought in good faith, the insured is liable to the insurance company for a sum of up to 25 percent of the amount of the claimed loss (Tenn. Code Ann. §56-7-106).