pilotyoung
Well Known Member
RV-10 $18,000 insurance quote
You are exactly right and that is called bad faith claim handling. The insurance company has a fiduciary duty to its insured to handle the claim in good faith. So in the situation you described, the insurance really has no limits after it refuses to settle the claim within the limits.
The other side of that situation is the when that claim in initially reported, the insurance company will send you a letter telling you that your liability limits are $100,000.00 and that the value of the liability claim may be more than your limits. The letter will suggest that you hire a personal attorney (in addition to the attorney the insurance company hired to defend you) to help you decide if you need to offer your personal assets in addition to the money from the insurance policy to settle the claim.
Many times in the course of the litigation, the plaintiff's attorney will be investigating you personal assets to see of there are assets to supplement the limits the insurance company has.
That is why you should buy the highest limits you can get. The highest I could get on my RV-12 for a passenger is $200,000.00. Since my Onex is a single seat aircraft, there is no sub-limit for passengers.
This is not a good situation to be in and it happens.
You are exactly right and that is called bad faith claim handling. The insurance company has a fiduciary duty to its insured to handle the claim in good faith. So in the situation you described, the insurance really has no limits after it refuses to settle the claim within the limits.
The other side of that situation is the when that claim in initially reported, the insurance company will send you a letter telling you that your liability limits are $100,000.00 and that the value of the liability claim may be more than your limits. The letter will suggest that you hire a personal attorney (in addition to the attorney the insurance company hired to defend you) to help you decide if you need to offer your personal assets in addition to the money from the insurance policy to settle the claim.
Many times in the course of the litigation, the plaintiff's attorney will be investigating you personal assets to see of there are assets to supplement the limits the insurance company has.
That is why you should buy the highest limits you can get. The highest I could get on my RV-12 for a passenger is $200,000.00. Since my Onex is a single seat aircraft, there is no sub-limit for passengers.
This is not a good situation to be in and it happens.