The holding in a new case in the California Court of Appeal, Bock v. Hansen, 2014 DJDAR 4280, (April 2, 2014) holds that an insured can sue a claims adjuster for negligent misrepresentation or intentional infliction of emotional distress. This is a landmark holding because it holds insurance claims adjusters and claims representatives, [the people that you speak to about your claims and who represent the insurance company’s position] can be held liable for their intentionally making false statements to an insured that discourages an insured from making or pursuing a claim.
Prior to this, insurance claims representatives who, in their zeal to protect the company and keep claims and losses low, were considered to be immune from personal liability for lying to insured claimants. This case states the the insurance claims adjusters have a “special relationship” with their insureds and intentionally or negligently providing false information about a claim or policy coverages is a breach of that fiduciary duty for which the claims adjuster may be personally liable. So, when an insurance claims representative falsely or incorrectly tells an insured claimant that the policy does not cover a loss when it acutally does, the adjuster may face personal liability for damages that flow from providing this false information.
The bottom line is that this helps hold insurance companies and their claims representatives accountable for misleading and lying to policy holders. We can hope and expect that this will lead to tighter controls in insurance company claims offices and more honest dealings between the insurance company and the insured public.