Blog Posts: Insurance

In Quihuis v. State Farm, --- Ariz. ---, 334 P.3d 719 (Ariz. Oct. 1, 2014),[1] the Arizona Supreme Court recently held that a stipulated fact in a Damron Agreement that is both an element of liability and essential to establishing coverage does not bind an insurer in subsequent coverage litigation. In so holding, the Supreme Court clarified that stipulated facts i...

A business benefits from adequate commercial general liability coverage, sometimes referred to as "CGL" insurance. Such a policy protects if someone is injured at the place of business. It also covers damage or injuries caused by company employees at a customer place of business or home. Typically, there are four basic categories of coverage in a CGL policy. These...

In Arellano v. Primerica Life Insurance Company, 235 Ariz. 371, 332 P.3d 597 (App. 2014), despite finding an insurer's conduct moderately to highly reprehensible, the Arizona Court of Appeals recently reduced a punitive damages award from $1,117,572 to $328,000—a 4:1 ratio to bad faith compensatory damages of $82,000. In so holding, the Court of Appeals conti...

If the Beaver owned a classic 1959 Ford Fairlane, he would not have been insured for UIM benefits under the Cleaver family auto policy.  In Beaver v. American Family Mutual Insurance Company, 234 Ariz. 584, 324 P.3d 870 (App. May 20, 2014),the Arizona Court of Appeals recently held that a policy's definition of an insured is valid under Arizona's Underinsured Mo...

In Newman v. Cornerstone National Insurance Company, 2014 WL 1257129 (Ariz.App. Mar. 27, 2014), the Arizona Court of Appeals held that a valid offer of underinsured motorist ("UIM") coverage need not include premium prices after it reached the exact opposite conclusion in Melendez v. Hallmark Insurance Company[1] only nine months earlier.   The Election Form In...

The test for first-party bad faith in Arizona case law is whether, during the "investigation, evaluation, and processing of the claim, the insurer acted unreasonably and either knew or was conscious of the fact that its conduct was unreasonable."[1] What does this vague definition of first-party bad faith actually mean in an insurer's everyday business of adjusting...

In Mendota Insurance Company v. Gallegos, 232 Ariz. 126, 302 P.3d 651, 657 (2013), the Arizona Court of Appeals recently held that a named insured's younger brother was a resident of his older brother's household and therefore entitled to underinsured motorist ("UIM") coverage despite the facts that Older Brother rented a room at friend's house and s...

By: Douglas L. Christian and Nathan D. Meyer I. Introduction Not often does a concept's name obfuscate its meaning. "Continuing bad faith," however, is much more than its name implies. An insurer's duty of good faith is pervasive and its application to claim handling has matured into a formidable body of law. The duty is not intractable and is generally shaped by t...

The Arizona Court of Appeals recently upheld as valid and enforceable a Damron Agreement in which an insured and its excess insurer assigned their rights against a primary insurer.  In so holding, the Court of Appeals made the significant declaration that an insurer who refuses to defend is bound for purposes of coverage by any issues determined in a...

The Arizona Court of Appeals recently upheld a trial court's reduction of a $55 million punitive damages award to only $620,000 and further reduced the punitive damages to $155,000-a 1:1 ratio to compensatory damages. The case, Nardelli v. Metro. Group Prop. & Cas. Ins. Co., --- Ariz. ---, 277 P.3d 789 (App. 2012) (Arizona Reporter citation not yet available), ...