The insurance claims process can be enormously frustrating for the claimant, or individual seeking insurance proceeds. A certain amount of conflict is inherent in this situation. On the one hand you have an individual, that is claiming a loss, and that believes they are entitled to monetary compensation from the other side. On the other side of the claim is an insurance company- often times a mammoth, gargantuan operation with billions of dollars of cash at play and essentially unlimited resources. The individual making the insurance claim has the obligation to prove that they sustained the loss and that they are entitled to compensation. The insurance industry has the obvious vested interest in denying, dismissing, or, as we see more and more of, engaging in every opportunity to minimize the loss. If it is a liability claim, it is an outsider, someone who is not an insured person, making the claim. There might be some institutional bias in treating an outsider- or what the law calls a third-party claimant- somewhat differently than a first-party claimant [i.e., an insured of the insurance company against whom the claim is made]. Maryland law is actually less friendly than the law in many jurisdictions in this regard but nevertheless provides that an insurance company at least owes a “quasi-fiduciary” duty to its insured, but no such duty to a third party “outsider”. I tend to see anger, anxiety, stress, and frustration in many personal injury claims. This emotional component is perhaps inherent in a personal injury claim, and it is understandable, for as the name of the claim suggests, the losses here are of a personal, perhaps intimate, and injurious nature. By way of contrast, in property damage or commercial loss cases, the nature of the claims may be monetary only in nature or related to some damage to an inanimate piece of property rather than personal, physical and emotional damage inflicted on a person. So, the insurance claims process generally can be a lengthy, frustrating and often disillusioning series of events. The angst, anxiety, consternation and mental anguish created by dealing with a recalcitrant claims adjuster leads many individuals to question whether they can sue an insurance company for either the way the claim was handled, the way that they were treated during the insurance process, or the ultimate result of the insurance companies investigations and settlement offer.
The answer here is no, there is no legal basis to sue an insurance company or a claims adjuster for the way the claim was handled or the results of that claim.
Maryland law recognizes that where an individual engages in extreme and outrageous conduct that is so far beyond the bounds of human decency, and what society is prepared to recognize as reasonable, then then a person that has sustained emotional damage as a result of that outrageous conduct may recover damages. The circumstances in which courts have found such conduct to be actionable are so rare that the claim essentially does not exist. Certainly [a party] “is never liable … where he has done no more than to insist upon his legal rights in a permissible way, even though he is well aware that such insistence is certain to cause emotional distress.’” 1. So long as an insurance company is denying a claim, delaying a claim or minimizing a claim based on some passably objective reason, Maryland law does not recognize any legal action for claims related conduct, even where it causes great distress. It may well be that in a singular circumstance, that has not yet occurred, an insurance claims adjuster, engages in some outrageous, unbelievably vindictive conduct that causes unbelievable, permanent damage to a claimant and that a suit against that insurance representative or the insurance company could potentially be successful.
Certainly in the typical personal injury case, the injured individual is entitled to recover both economic and non-economic damages. Here, an injured person can expect to receive compensation for medical expenses, lost wages, compensation for physical and emotional distress, discomfort, and pain. The law recognizes compensation for these losses where they are due to a cognizable personal injury. Non-economic damages certainly take into account frustration, consternation, embarrassment, aggravation that are associated with the loss of the disruption of one's life insurance. The law at this point has not recognized a separate claim for consternation, aggravation, distress, anxiety and frustration result from the claims process.
I've made a career of battling insurance companies, to ensure fair compensation for those I represent. Personal injury claims can be maddening, and often counsel, and a lawsuit are required. I'd be happy to take a complimentary look at your claim and offer my opinions and advice. feel free to contact me today to schedule a discussion.
FN1. Young v. Hartford Accident and Indemnity Co., 303 Md. 182, 190, 492 A.2d 1270, 1274 (1985) (quoting Restatement (Second) of Torts §46 (1965), Comment G.