Suing for Emotional Distress After Alleged Bad Faith in Oregon

Many states recognize an individual’s right to file a negligence claim due to insurance bad faith. Oregon was one of the states that did not recognize these claims in previous years. However, Moody v. Oregon Community Credit Union was a case that changed this, and the result was that when an insurance company violates fair settlement practices and is negligent, a claimant may file a negligence claim against them.

If you want to learn more about negligence claims and bad faith in Oregon, you can connect with our Portland bad faith law firm at Rosenbaum Law Group and speak with an attorney. You may be able to file a claim and obtain financial compensation for the emotional distress an insurer caused you.

Why Does Oregon Allow Negligence Claims Arising from Bad Faith? 

The relationship between an insurer and a policyholder is one where the insurer is expected to pay out financial benefits under the terms of an insurance policy while the policyholder keeps their account current and pays for the coverage.

Bad faith happens when an insurance company refuses to make good on its side of the agreement, and a policyholder is harmed. This could be by unfairly denying benefits or delaying the investigation of a claim, for example.

The state of Oregon used to be very wary about allowing policyholders to obtain damages through negligence claims against insurers. But, Moody v. Oregon Community Credit Union turned this hesitation around.

In the Moody case, an insurance company denied a claim made by the beneficiary of a decedent because the decedent was said to have tested positive for marijuana at the time of his death. The insurance company argued that the decedent had a substance in his system when he died, which violated the terms of the policy. The policy excluded deaths that were caused by, or that resulted from the intoxication of a deceased individual.

The problem with this determination was that the decedent didn’t die due to anything related to the marijuana. Rather, the individual died because a friend accidentally shot him.

As a result, the beneficiary sued the insurance company saying they engaged in unfair claim settlement practices which are unlawful in the state of Oregon. The beneficiary claimed the whole ordeal related to the claim denial after a violation of insurance laws entitled her to financial damages for her emotional distress. Eventually, the courts agreed that claimants should not have to experience a stressful claims process arising from insurance companies engaging in unfair claim settlement practices.

After this verdict, policyholders in Oregon were granted the right to take legal action against their insurer and hold them accountable if they engaged in negligence while handling a claim.

Speak to an Oregon Bad Faith Attorney Today 

Suppose you believe that your insurance company acted in bad faith, which caused you emotional trauma. In that case, it is best to consult with an attorney to learn about what options you have to hold them legally accountable.

For assistance, please call a Portland, OR, civil law attorney at Rosenbaum Law Group today at (503) 288-8000 to schedule a free consultation with an experienced attorney.

Source:

wilson.gjassets.com/content/uploads/2024/01/Moody_v_Oregon-Community-Credit-Union.pdf