State Farm Wins Bad Faith Case

In Dunbar v. State Farm, a federal judge in Oklahoma granted summary judgment to State Farm in what was really a silly bad faith case.

This case involved a pedestrian accident where somebody backed out of their driveway and hit someone. USAA tendered, albeit slowly, its $100,000 limits for the at-fault driver. State Farm did what it does, it slowly increased the offers over time. But in this case, medical records were provided, for whatever reason, over time, making State Farm’s increase in offers seem quite reasonable. Eventually, State Farm tended its entire policy of $200,000. Because it was an uninsured motorist case, that should have resolved the claim. But Plaintiff’s accident lawyer proceeded with the claim under the theory that State Farm should have made the offer sooner, but was dragging their feet.

I don’t get it. Neither did the appellate court. The opinion also underscores Oklahoma law – and Maryland’s – that regardless of the severity of injury, an underinsured claim does not kick in until the underlying policy tenders its limits. So if you have a death case and the at fault driver has a $30,000 policy, the underinsured motorist coverage obligations do not kick in until the underlying policy has been offered.