No Bad Faith Claim Against Adjuster
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No Bad Faith Claim Against Adjuster

The Washington Court of Appeals sent shock waves through the insurance community when it ruled an insured could maintain a suit for bad faith against an insurer and its claims adjuster. The insured had brought a claim for bad faith, violation of the Washington Insurance Fair Conduct Act (IFCA) and violations of the Consumer Protection Act (CPA). In a highly anticipated decision, the Washington Supreme Court granted a reprieve to insurers and their adjusters in a close 5-4 vote. Reversing the Court of Appeals, the Court held the IFCA did not imply a private right of action in favor of the insured against the insurer's claims adjuster arising out of the settlement negotiation of a claim for UM benefits. It also found the unfair settlement practices defined in the State Administration Code did not authorize a cause of action against the claims adjuster for unfair settlement practices under the CPA and, the statutory duty of good faith owed by an insurer under the IFCA was not actionable against the claims adjuster under CPA.
 

Keodalah v Allstate Insurance Company