Sometimes getting an insurance company to make payment after a car accident is as difficult as determining who is to blame for the crash. In Novoa v. Geico, the U.S. District Court for the Southern District of Florida explains insurers' responsibility to bargain in good faith.
Jose Ordonez was killed in a car accident in Florida on November 10, 2007. Ordonez had stopped the car he was driving to aid a stranded motorist on the side of the road when a car driven by Christopher Meldon slammed into the stranded vehicle. Ordonez's car was also damaged in the accident.
The accident was reported to Geico, with whom Meldon had an insurance policy covering $10,000 for bodily injury and $10,000 for property damage, on the day it occurred. The company sent a check for $10,000 to Ordonez's wife - Vivian Novoa - 17 days later. Claims examiner Lisa DePoy explained in the accompanying letter that the money represented the limit of Meldon's bodily injury coverage. She also requested that Novoa send her insurance information to Geico so that it could evaluate her claim for property damage.
The letter also included a release agreement, which the company asked Novoa to sign. Although the document indicated that Novoa would be releasing all claims against Geico stemming from the accident, the company stated in court filings that the release was intended to cover only the bodily injury potion of her claims.
Instead of depositing the check and signing the release, Novoa responded to Geico by demanding payment of $3,100 to cover the damage to Ordonez's car on Dec. 12, 2007. She hired a lawyer a month later and sued Meldon for wrongful death and Geico for PIP death benefits. She later settled the claim against Geico. Before receiving a copy of the complaint, Geico countered Novoa's property damage demand by offering nearly $1,500. The company explained that the stranded motorist also filed a claim for property damage. Because the combined claims exceeded the $10,000 coverage limit, the company offered Novoa a pro-rated amount.